The Central Bank of Nigeria Sold $4.4 Billion of Foreign Exchange to Dealers in April-May

The foreign exchange market has been one of the most vibrant markets in the world for the better part of 2019 and the reasons for that are manifold. The trade war between the United States and China, coupled with the general uncertainty over the United States Federal Reserve’s stance of rate cuts have been major factors in this regard. It forced plenty of investors to park their money in more secure assets and foreign exchange proved to be a particularly enticing one. Over the past few months, the United States Dollar has appreciated consistently and it has done so over the past few days as well. It has now emerged that one of the biggest sellers of foreign exchange to certified dealers during April and May was the Central Bank of Nigeria. During those two months, the CBN sold a total of $4.4 billion worth of forex to authorized dealers.

The news about the forex dealing of this magnitude was revealed in the bank’s report for May about foreign exchange market developments. The reports stated,

“The bank continued to intervene in the foreign exchange market to further sustain the improved liquidity and relative stability in the market. Thus, a cumulative sum of $2.04bn was sold by the bank to authorized dealers in May 2019, compared with $2.43bn supplied in April 2019.”

These are significant amounts of foreign exchange that have been sold by the bank over those two months and no concerns have been raised over such a colossal sale of forex to dealers. According to several reports, the value of the United States Dollar is expected to increase over the coming days against most currencies across the world. The United States Federal Reserve is going to have it meeting with regards to rate cuts on July 30 and 31, following that the rate cuts are going to be introduced. Earlier on, many investors had expected a higher rate cut, but recent reports state that they are going to be disappointed.