Naira appreciates against dollar in parallel market


CBN commences special fx sales to BDCs today


The naira continued to recover from its slump against the dollar last Thursday, as the local currency yesterday closed at N365/$ in the parallel market from N369 per dollar the previous day, traders said.

Forex dealers said the naira had exchanged at N364 per dollar earlier in the day before slightly weakening to N365/$.

A Lagos-based Bureaux De Change (BDC) operator, Mr. Matthew Osifo, attributed the naira’s recovery to the Central Bank of Nigeria’s (CBN) interventions in the forex market since last Friday as well as the expected commencement today of the Apex Bank’s $15,000 weekly Yuletide special intervention forex sales to BDC operators.

“The CBN’s flooding of the market with dollars is achieving the desired result because what is happening is that traders are quickly selling off any dollar that they purchase given that they know they will easily buy the greenback whenever they want to,” he said. “This is responsible for the naira’s appreciation.”

He disclosed that many BDCs had already deposited the required naira into their bank accounts to enable them participate in today’s special forex intervention by the CBN.

Following the naira’s slump to N370 against the dollar last Thursday due to what traders described as dollar shortage occasioned by rising demand for forex, the CBN had responded swiftly by introducing the $15,000 weekly Yuletide special intervention forex sales to BDC operators, which it said would begin today.

In a statement, signed by CBN Director, Trade & Exchange Department, U. Abdullahi, he explained that with the approach of yuletide season and the resultant increase in the demand for Personal/Business Travel Allowances, the apex bank has in addition to the existing market days, Monday, Wednesday and Friday, introduced a special intervention day every Thursday. Each BDC operator will get $15,000 commencing tomorrow.

“Consequently, all BDCs should note that the cut-off time for receiving Naira deposits into their respective bank accounts for the Thursday’s special intervention shall be 10am on the Thursday. All operators are hereby advised to ensure strict compliance with the provisions of the extant regulations on the disbursement of forex cash to their respective customers as any case of infraction will be appropriately sanctioned,” Abdullahi said.

The CBN Governor, Godwin Emefiele, while delivering the Annual Bankers’ Dinner lecture of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos last Friday, had warned speculators not to bet against the naira, stressing that the regulator had enough reserves to defend the local currency.
Last Friday, the CBN injected a total sum of $331.22million in retail Secondary Market Intervention Sales (SMIS) and CNY51.86million in the spot and short-tenored forwards of the inter-bank foreign exchange market. Similarly, last Tuesday, it pumped a fresh $210million into the market.