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In a strategic move aimed at shoring up the naira, the Central Bank of Nigeria (CBN), on Monday, said it has commenced the sale of forex at the rate of N1251/$1 to Bureau De Change (BDC) operators.
This was contained in a circular by the apex bank to the BDCs, informing them that it has sold $10,000 to each operator at a rate of N1,251 per dollar.
CBN also directed the operators of each BDC to sell the dollars to eligible customers at a rate not exceeding 1.5% above the purchase price.
The document titled: “Sales of FX to BDCS to Meet Retail Market Demand for Eligible Invisible Transactions read: “We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject wherein the CBN approved a second tranche of sale of FX to eligible BDCs.
“We write to inform you of the sale of $10,000 to each BDC at the rate of N1,251/51. The BDCs are to sell to eligible end users at a spread of NOT MORE THAN 1.5 per cent above the purchase price.
“All eligible BDCs are directed to make the naira payment to the underlisted CBN Naira Deposit Account Numbers before close of business on Thursday March 28, 2024, and submit confirmation of payment, with other necessary documentation, for disbursement at the appropriate CBN Branches:”
Analysts have said that the interventions by the apex bank are yielding positive results as the naira appreciated by 12 per cent week-on-week basis to close at N1,431.49/$1 at the Nigerian Autonomous Foreign Exchange Market (NAFEM). Within the last week, the naira made remarkable gains since it slumped to over N1,000/$1 in February.
The apex bank intervened thrice in the last seven days with total sales of FX at $195 million.
Data obtained from the FMDQ website, where the exchange rate is officially set, revealed that activity level in the NAFEM window increased 47.2 per cent w/w to $1.5 billion. In the currency market, the Naira appreciated 12 per cent w/w against the dollar to N1,431.49/$1 whilst it gained 6.7 per cent against the dollar to close N1,495/$1 at the parallel market.
At the NAFEM, total turnover (as of 21 March 2024) increased by 16.4 per cent week-to-date (WTD) to $1.21 billion, with trades consummated within the N1,300.00 – N1,640.00/$ band. In the Forwards market, the naira rates recorded appreciation across the 1-month (+9.6 per cent to N1,460.81/$), 3-month (+9.4 per cent to N1,500.26/USD), 6-month (+8.4 per cent to N1,562.99/$ and 1-year (+6.5 per cent to N1,705.82/USD) contracts.
