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Naira slumps despite resumption of forex sales to BDCs

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Despite resumption of forex sales to Bureau de Change operators, the Nigerian currency slumped in the parallel market Thursday.

Checks by PREMIUM TIMES showed that the naira exchanged to the dollars at N440 in Lagos, down from N433 on Wednesday.

Last week, the CBN announced its proposed resumption of sales of forex to BDCs.

In a statement signed by O.S. Nnaji, its director of trade and exchange department, the bank said forex sales would commence with effect from September 7.

The bank said the move was part of efforts to enhance accessibility to foreign exchange particularly by travellers.

“As part of efforts to enhance accessibility to foreign exchange particularly to travelers following the announcement of the limited resumption of international flights by the Honourable Minister of Aviation commencing with Abuja and Lagos, the Central Bank of Nigeria hereby wishes to inform the General Public that gradual sales of foreign exchange to licensed BDC operators will commence with effect from September 07, 2020,” the circular said.

“Consequently, purchase of foreign exchange by BDCs shall be on Mondays, and Wednesdays in the first instance,” it added.

The bank noted that BDCs are to ensure that their accounts with the banks are duly funded with the equivalent Naira proceeds on Fridays and Tuesdays accordingly.

“Meanwhile, Authorised Dealers (deposit money banks) shall continue to sell foreign currencies for travel related invisible transactions to customers and noncustomers over the counter upon presentation of relevant travel documents (passport, Air ticket & Visa),” Mr Nnaji said.

“All Authorised Dealers and Bureau De Change Operators are hereby advised to ensure strict compliance with the provisions of the extant regulations on the disbursement of foreign exchange cash to travellers, as any case of infraction will be appropriately sanctioned.”

Earlier in March, the CBN had suspended foreign exchange sales to Bureau De Change (BDC) operators.

Following the announcement last Friday, the naira appreciated from N480 against the United States’ dollar to N420.

At the weekend, PREMIUM TIMES understands that hoarders were thereafter forced to dump the greenback amid uncertainties.

Continued Plunge

But when forex sales to BDCs resumed earlier in the week, the Nigerian currency plunged.

On Monday, over 5,000 BDCs received $10,000 each from the apex bank.

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Yet at the parallel market Thursday, the naira was bought at N440 (against one US dollar) and sold for N455.

Earlier on Wednesday, it sold for N445 and was bought at N433.

As of 10:53 Friday morning, checks by PREMIUM TIMES revealed that the naira sold for N460/$1 and is being bought for N440/$1 in the parallel market.

The Nigerian currency is also being valued against the British pound at N560 and the Euro at N505 as of press time Friday.



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