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The Central Bank of Nigeria (CBN) has sold $48 million to authorized dealer banks in its ongoing efforts to stabilize the naira and enhance liquidity in the official foreign exchange market. This intervention comes as the CBN prepares to implement an automated FX trading platform using the Bloomberg BMatch system.
The dollar auction is expected to ease pressure on the naira by bolstering liquidity and mitigating its depreciation against the U.S. dollar. However, FX interventions have seen a decline recently, following the apex bank’s announcement of plans to automate NGN/USD trading.
A reduction in FX liquidity has significantly weakened the naira’s value across various forex markets. Despite an uptick in Nigeria’s gross external reserves, which currently stand at $40.26 billion, the CBN reportedly slowed its FX market interventions by 30% last month.
According to TrustBanc Financial Group’s market update, Wednesday’s intervention signals the CBN’s continued commitment to stabilizing the naira. Meanwhile, the Nigerian government has secured approval for $2.2 billion in external borrowings, further supporting its economic stabilization efforts.
The anticipated introduction of the Bloomberg BMatch system for FX trading aims to improve market transparency and rebuild investor confidence. Market analysts predict that this platform will streamline trading processes and provide clearer insights into currency market dynamics.
As global oil prices fluctuate within the $72–$75 per barrel range, the effectiveness of these measures remains crucial for Nigeria’s economic outlook and the strength of its local currency.
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