Africa’s Throwing Away Dollars It Can’t Afford in Currency Rout

Naira Gains, Sells N378/$1 On Increased Dollar Inflow

By Nse Anthony-Uko
ABUJA, (Sundiata Post) – The value of the naira firmed at the parallel market on Thursday after the Central Bank of Nigeria pumped more dollars to the economy through the interbank and Bureau de Change ends of the foreign exchange market.
The Naira firmed up at the Bureau de Change (BDCs) segment on Thursday, trading at between N376 and N378 to the United States Dollar in Lagos, Abuja and Kano, following interventions by the CBN.
A market survey revealed that the Naira, which sold at over N405 to $1 as Monday this week, recorded a boost.
There were indications that the appreciation of the Naira was as a result of policy actions of the CBN to inject more foreign exchange into the financial system, specifically targeting critical sectors in addition to special interventions in the areas of SMEs and BDCs.
According to a source at the apex Bank, the Naira is expected to appreciate further when the BDCs receive another tranche of $20,000 purchases from the CBN.
The CBN in its bid to sustain supply of liquidity to the foreign exchange market, made special interventions by simplifying the documentation process for the SMEs to enable them import eligible items and also increased both the amount and number of sales to the BDCs.
Increased dollar sales by the apex bank particularly to the BDC operators had cut back demand pressure on the naira. The CBN this week had increased the amount of dollars it sells to the BDC operators from $20,000 per week to $40,000 per week, having sold an initial $20,000 on Tuesday and another $20,000 Thursday.
It had also put $380 million into the interbank market to meet forwards, spot and invisibles demand as well as demand by small businesses on Tuesday offering $100 million in wholesale 7-45 days forwards while invisibles such as Basic Travel Allowance, Personal Travel Allowance, medical bills and tuition received $80 million.
The CBN also sold $100 million through the Small and Medium Enterprises (SMEs) window. The apex bank on Wednesday had offered $100 million at the interbank market but banks were only able to take up $68 million as they ran out of naira.
Traders at the parallel market said demand for the greenback had declined pushing down the value of foreign exchange on the streets. The British Pound was also down to £495 to the naira from £503 while the Euro declined to €410 from €433 which it sold on Wednesday

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