CBN ‘Special Intervention’ Bolsters Naira

The Naira once more, appreciated significantly at parallel market Wednesday  following a $50 million special intervention to Bureaux De Change (BDCs) operators across the country by the Central Bank of Nigeria (CBN).

The local currency advanced significantly by N4 to N157.50 to a dollar, from the N161.50 to a dollar it went for on Monday. This was in line with the regulator’s mission of closing the gap between the official and parallel segments of the foreign exchange (forex) market. The injection was aimed at ensuring that the perennial shortage of forex in the system since last month is addressed.

However, attempt to confirm the development from to the apex bank was not fruitful as the CBN’s Head, Corporate Communication, Mr. Mohammed Abdullahi, who did not pick his call, also failed to respond to a text message on the development. The increased supply,  it was learnt, was offered through five banks at stipulated exchange rate.

President, Association of Bureaux De Change Operators of Nigeria (ABCON), Mr. Emmanuel Balogun, who also confirmed the development, commended the action of the regulators. He explained that the move would help address the demand gap in the retail-end of the forex market and also enhance the value of the Naira in the economy. He appealed to BDC operators to take advantage of the intervention by ensuring the availability of the greenback to end-users, even as he urged the operators to visit the banks involved in the special offer.

Balogun emphasised the importance of ensuring proper documentation of the purchase and sale of the currency as well as other forex transactions. He advised members to make sure that they render regular and prompt returns of all transactions as required by the CBN. He pointed out that as the umbrella body of BDCs in the country, "ABCON believes this development would stimulate a further decline in the parallel market exchange rate." However, at the second session of the CBN bi-weekly auction Wednesday, while the regulator offered a total of $400 million at N152.10 to the dollar, total demand stood at $558.38 million.
At the interbank leg of the market, the local currency closed at N154.30 to a dollar. The CBN had through a circular last week, approved the lifting of the ceiling of $1 million as maximum amount that can be sold to BDC operators from autonomous funds weekly. It had earlier increased supply at the bi-weekly auction, from $50,000 per BDC to $100,000 per BDC.