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Naira appreciates to N454/$

 News By: adekunle    Tuesday, March 14, 2017


By Babajide Komolafe

The naira yesterday appreciated against the dollar by N6 in the parallel market due to expectation of further intervention in the foreign exchange market by the Central bank of Nigeria (CBN).

Vanguard investigation reveals that the parallel market exchange rate dropped to N454 per dollar at the close of business yesterday from N460 at the end of last week.

A BDC operator who spoke to Vanguard on condition of anonymity said that market activities were stagnant with an atmosphere of suspense as BDCs are yet to receive communication from the CBN about the amount of dollars that t would be sold to each of them BDC this week.

The CBN sells $8000 per week to each BDC at N381 per dollar, mandating them to sell at N400 to end users. But last week, President of Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe announced that the apex bank will this week increase weekly dollar sale to $15,000 per BDC. Vanguard however gathered ABCON yesterday sent message to its members to address the apprehension over dollar sale from the CBN this week.

Confirming this to Vanguard, ABCON President, Gwadabe said: "It is true that the CBN is yet to communicate the amount they will sell to each BDC this week, but we are sure they will do so before the weekly cut off time of 12noon tomorrow. We have told our members not to panic and engage in speculation."

On Sunday the CBN indicated it's willing to further conduct intervention dollar sales in the foreign exchange market this week.

In a statement issued on Sunday, Acting Director, Corporate Communications Department, apex bank said: "said that bank was determined to sustain the provision of liquidity in the foreign exchange market in order to enhance accessibility and affordability for genuine end users.

Mr. Okorafor also cautioned dealers in foreign exchange not to engage in any unwholesome practice that is detrimental to smooth operations in the market, warning that the CBN would impose heavy sanctions on any organization or official involved in such act.

Since Monday February 20th2017, when it announced new measures to boost dollar supply and forestall the declining fortunes of the naira in the parallel market, the CBN has injected $1.3 billion dollars by intervening in the forex market seven times as follows: Tuesday February 21st, $417 million; Thursday February 23rd, $231 million; Monday February 27th, $180 million; Friday March 3, $350 million; Monday March 6, N367 million; Tuesday march 7, $100 million and on Thursday March 9, $195 million.

Also during the week, the CBN increased weekly dollar sales to Bureau De Change (BDCs) by increasing the number of BDCs that have access to the dollar sales to 3,114 from about 2000.