CBN sells $10,000 to BDCs at N1,021 per dollar

The Central Bank of Nigeria, CBN, has approved the sale of an additional 10,000 dollars to 1,583 eligible Bureaux De Change, BDC, operators in the country to meet the demands of the market. The CBN’s Director, Trade and Exchange Department, Dr Hassan Mahmud, made this known in a letter addressed to the President, Association of Bureau De Change Operators of Nigeria, ABCON, on Tuesday in Abuja. Mahmud said that the CBN would sell to the BDCs at the rate of N1,021 to a dollar. “The BDCs are, in turn, to sell to eligible end users at a spread of not more than 1.5 per cent above the purchase price,” he said. He directed all eligible BDCs to commence payment of Naira deposit to some designated CBN Naira deposit account numbers. “All BDCs are advised to continue to abide by the rules and conditions as stipulated in our earlier operational guidelines,” he added. Recall that on April 8, the apex bank approved the sale of 10,000 dollars to 1,588 eligible BDC operators at the rate of N1,101 to the dollar amid efforts to stabilize the Naira at the FX market. The development comes amid the recent drop in the value of the Naira against the dollar. From last month to date, the Naira has depreciated four times.

Naira falls record all-time low of N900 at parallel market

The naira plunged to a record low of N900/$1 on the parallel market on Tuesday, as demand for foreign currency outstripped supply with traders quoting the exchange rate as high as N900/$1 for “inflows” and N895/$1 for cash trades. The peer-to-peer market, where cryptocurrency traders exchange forex, also saw the exchange rate soar above N900/$1. Meanwhile, in the official Investor and Exporter Window, the exchange rate closed at N774.78/$1 while the NAFEX rate was N776. The official market also faces supply constraints, with daily turnover averaging $80 million since July. Forex traders attributed the depreciation of the naira to supply constraints saying there were more buyers than sellers in the market and that the situation was unlikely to improve anytime soon. When asked about the source of the increased demand, traders mentioned a diverse set of buyers, including importers, foreign travellers, and speculators. There are concerns among some traders that the state of depreciation is unlikely to improve as demand continues to rise unchecked. Analysts explained that there was a huge backlog of unmet forex demand in the official market, estimated at $8-10 billion. Some of this demand also spills over to the parallel market, as buyers struggle to find enough supply to meet their needs in the official market. The exchange rate between the naira and dollar has weakened by 16 per cent since the reunification of the exchange rate windows. This compares to a depreciation of 2.5 per cent between January 1 and June 14th. The exchange rate weakened by 22.9 per cent in the whole of 2022. The naira has been under pressure in the parallel market for several weeks, as the supply of forex from official sources remains inadequate. On July 1st, the beginning of the second half of the year, the exchange rate in the parallel market was around N772/$1. However, a surge in demand from various segments of the economy, such as importers, foreign travelers and speculators, has triggered exchange rate volatility.

Naira ends week in 0.93% loss against dollar

The Naira experienced a 0.93% loss against the dollar, ending the week at an exchange rate of N775.76 at the Investors and Exporters window. This decline was in comparison to the rate of N768.60 recorded on Thursday. The open indicative rate stood at N776.74 to the dollar on the same day. Throughout the trading session, the spot exchange rate fluctuated, with the highest recorded rate being N799.50 before settling at N775.76. Conversely, the Naira saw some low points, reaching N465 to the dollar during the day’s trading. Overall, a total of 54.18 million dollars was traded at the investors and exporters window on Friday, highlighting the continued activity in the foreign exchange market. The fluctuations in the Naira’s value against the dollar reflect the ongoing challenges in the currency’s stability and the broader economic landscape. Investors and traders closely monitored these developments to make informed decisions amidst the volatility in the exchange rates.