News
Stop Forex Auctions, Strengthen Naira Instead – World Bank Tells CBN
The Central Bank of Nigeria (CBN) is urged by the World Bank to avoid forex auctions and instead adopt a structured, transparent approach to foreign exchange interventions to stabilize the naira.
This recommendation was highlighted in the Nigeria Development Update, which suggests CBN focus on a flexible, market-reflective exchange rate policy to foster economic stability.
EDITOR’S PICKS
- ‘I Feel Sorry For Joshua’ After Knockout Loss To Dubois – Fury
- EPL: What We’re Lacking Is Luck – Ten Hag Reacts After Loss To West Ham
- REVEALED: Why TCN Is Struggling To Resolve Power Outages In Northern States
EKO HOT BLOG reports that in a significant shift from its previous methods, the CBN conducted a retail Dutch auction on August 26, 2024, auctioning $876.26 million directly to end users, a departure from the Bureau de Change sales it once favored.
This move, overseen by Governor Yemi Cardoso, aimed to boost foreign exchange liquidity, ease demand pressures, and support market price discovery. The auction granted dollars to 3,347 firms through 26 banks at a cut-off rate of N1,495 per dollar.
The World Bank report advises deepening the FX market by allowing participants to trade more flexibly over time and recommends that international oil companies sell FX in the official market exclusively.
Additionally, the bank emphasizes formal remittances, intermediated access for bureaux de change, and gradually building foreign reserves to underpin exchange rate stability.
Further, the report calls for maintaining a unified, market-driven exchange rate to strengthen fiscal revenues, draw investment, and expand reserves, ultimately supporting a robust economic environment for trade and growth.
Forex Auctions World Bank CBN
By securing a predictable exchange rate, the CBN could enhance government revenues from oil and other export-related activities, as well as customs and VAT on imports, while promoting investment and inclusive growth.
Whether the CBN will incorporate these recommendations into its policy framework remains uncertain.
FURTHER READING
- Oko-Abe Community High School Nears Completion as Rep Wale Raji, Education Commissioner Tolani Alli-Balogun Inspect Epe Schools
- NLC Knocks IMF Over Fuel Subsidy Removal Denial
- N3 Billion Fraud: Labour Ministry Summons National Assembly Staff Leadership
Advertise or Publish a Story on EkoHot Blog:
Kindly contact us at [email protected]. Breaking stories should be sent to the above email and substantiated with pictorial evidence.
Citizen journalists will receive a token as data incentive.
Call or Whatsapp: 0803 561 7233, 0703 414 5611
