The Central Bank of Nigeria, in its latest move to stabilize the exchange rate, has directed Deposit Money Banks to sell their excess dollar stock by February 1, 2024.
This new directive targets banks with excess dollar liquidity exceeding $5 billion, aiming to discourage hoarding and reduce risks associated with holding large foreign currency positions.
The CBN's circular emphasizes the need for banks to commit their foreign exchange holdings to specific transactions or obligations to promote liquidity and stabilize the exchange rate.
The decision follows recent warnings against false reporting of exchange rates and coincides with adjustments to the nation's official exchange rate methodology by the FMDQ Exchange.
The CBN anticipates that selling excess dollars will attract foreign investors and contribute to exchange rate stability.
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