Naira appreciates to N296/$

LAGOS — The Naira, yesterday, appreciated to N296 per
dollar in the parallel market due to expectation that the
Central Bank of Nigeria (CBN) will sell autonomous dollar
to bureaux de change this week.
Vanguard’s survey of major cities reveals that in Lagos the
Naira appreciated by N4 as the parallel market exchange
rate dropped from N300 per dollar on Friday to N296 at the
close of business yesterday.
In Abuja, the Naira appreciated by N5 as the parallel market
rate fell to N295 from N300, while in Kano, the Naira gained
N2 as the parallel market exchange rate dropped to N298
from N300.
Bureaux de change sources, who confirmed this
development to Vanguard, explained that the appreciation
was driven by expectation of inflow from the CBN.
President, Association of Bureaux de Change Operators of
Nigeria (ABCON), Alhaji Aminu Gwadabe, confirmed to
Vanguard that while the expectation that CBN will start
selling autonomous dollars to BDCs made the parallel
market rate to fall to as low as N285 per dollar in the
afternoon, the rate, however, rose to N295 towards the end
of the day when expectation did not materialise.
Chief Executive Officer, H. J. Trust BDC also confirmed this
development, saying: “There was rumour that the CBN will
start selling to us, so nobody was willing to buy dollars, and
this forced the rate to crash. But the rate went up again
towards the end of the day.”
Last Friday, the CBN had pledged to explore the option of
selling autonomous dollars sourced from oil firms to BDCs
so as to address the sharp and stead depreciation of the
Naira in the parallel market.
This was an outcome of a meeting held, yesterday, between
the management of the CBN led by the Governor, Mr.
Godwin Emefiele and the Executive Council of Association of
Bureaux de Change Operators of Nigeria.
On Monday, the CBN stopped the direct sale of dollars to
BDCs, a situation which triggered N35 depreciation of the
Naira in the parallel market as the exchange rate in the
market moved from N280 per dollar on Monday to N305 on
Wednesday.
Miffed by this situation, the CBN Governor invited ABCON
Executive Council to a meeting in Lagos to discuss ways to
arrest the Naira depreciation in the market.
Confirming this development to Vanguard, ABCON
President, Gwadabe, said the association made it clear to
the CBN that the Naira depreciation was due to scarcity of
dollars, which was aggravated by the decision to stop
selling dollars to BDCs.
Said he: “We made it clear that the situation will persist
except there is some form of intervention in the market. We
also discussed how BDCs could source dollars from
autonomous sources.
“In the end, the CBN Governor said that while the apex bank
cannot resume sale of dollars from the nation’s external
reserve to BDCs, it will consider selling dollars sourced
from autonomous sources to them.
“The governor said the apex bank would source
autonomous dollars from oil firms for direct sale to BDCs so
as to ease the demand pressure in the parallel market.
“The modalities, however, will be worked out and
announced next week. We hope that this would help to calm
the market and stabilise the exchange rate of the Naira in
the parallel market.”