Naira strengthens at official window, weakens on black market

Bisola David
Bisola David
CBN prepares tough financial sanction for banks

The naira appreciated in the official window on Monday following a statement by the governor of the Central Bank of Nigeria, Olayemi Cardoso.

According to The PUNCH, in the statement, he assured the public that the central bank was working to address the currency’s volatility.

Based on information from the FMDQ, the local currency increased by 1.09 per cent to settle at 1,419.86/$ at the official forex window.

On Friday, the dollar was traded for 1,435.53/$ while on Tuesday, at the official window it fell sharply to an all-time low of 1482.57 /$, defying efforts by the Federal Government and the Apex Bank to increase liquidity in the foreign exchange market.

However, after the CBN made a number of policy announcements, the local currency recovered.

According to Bureau de Change operators, the naira did not fair better in the parallel market, where it was traded at the close of business on Monday between 1,440/$ and 1,460.

The alternative forex market finished trade on Friday with the naira at 1,450/$.

The BDC operator at the Sheraton Hotel in Abuja, Mr. Abubakar Abdusallam, stated that hoarders’ actions were the reason why the dollar was steadily strengthening against the naira.

He stated, “We are buying at 1,445/$ and selling dollars at 1455/$ today.”

“Today, we traded dollars at the rate of N1,440 and that is the best I can do,” said another BDC operator, Surajo Sani.

Ibrahim offered the highest rate, stating that the price at which he sold the dollar was N1,460

Today’s dollar value is N1,460. However, he emphasized that the same individuals continue to buy and hoard.

Cardoso had earlier on Monday stated that the central bank had worked very hard to remove all of the obstacles impeding the flow of foreign exchange into the nation.

“The difficulties with remittance flows have been resolved, banks’ capacity to hold onto positions has been curtailed, and—above all—the export earnings from the country’s energy sector are now passing through the central bank.

“In order to entice international investors to naira assets, we have also started a variety of short-term initiatives.

“Our ability to address the fundamental issues affecting our economy, control inflation, and foster the growth of Nigerian businesses so that we eventually export much more than we consume as a nation will determine the eventual stability of the naira.”

He went on to say that the apex bank has settled verified FX demands totaling $2.3 billion, and that the remaining FX requirement, N2.2 billion, will be fulfilled very soon.

“We found that about $2.4 billion of the approximately $7 billion had issues,” he stated.

Examples include not having legitimate import documentation, occasionally requesting foreign exchange but receiving more than requested, and occasionally receiving money from businesses that did not exist. There were numerous violations present.

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