The Central Bank of Nigeria (CBN) hopes to stop the naira’s poor performance in the foreign exchange market as it begins dollar sales via retail auction today, Tuesday, August 8, 2024.... CLICK TO READ THE FULL NEWS HERE▶▶
Data from FMDQ Securities showed that the dollar is selling for over N1,600 in the Nigerian Autonomous Foreign Exchange Market (NAFEM), which is the official market.
The naira is facing significant pressure due to seasonal demand from summer tourists and importers.
In the last year, naira has depreciated against the US dollar by more than 70%.
CBN changes to retail auction today
The apex bank is hoping that selling dollars at a retail auction today will halt the trend of naira depreciation.
BusinessDay reports that the CBN has already received a list of all outstanding FX demand by end-users from authorized dealer banks after telling banks in a circular that it was diverging from the usual wholesale auctions to banks.
In the circular, CBN said that the change is in response to the “growing unmet foreign exchange demand.”
Historically, the central bank has utilized both retail and wholesale currency auctions to supply dollars to the market.
The retail auction directly serves customers, while the wholesale auction provides dollars to banks.
The CBN sold $369 million in July 2024 while buying less than $20 million from the deposit money banks, which failed to give the desired effect.
The CBN will be hoping that its change of tactics will yield the desired results and bring the naira below N1,600.
