The Naira sold for N430 per dollar at the parallel market on Monday, days after the Central Bank of Nigeria recommenced foreign exchange sales, thus posting some gain over last week’s rate, which closed at N465.
The apex bank had on April 29 announced it would continue the supply of forex to commercial banks for sales to parents wanting to make payment for their children school fees and small businesses seeking to import essentials required to revamp economic activities.
“The partial lifting of the suspension on forex sales through the CBN announcement on school fees and the SMEs imports funding through the CBN window was what broke the camel’s back and a drive toward flattening the curve in the forex market, and led the naira to gain over 3.5 per cent strength over the dollars from an all high of N470/$ on Wednesday last week to N430/$ at the close of business today (Monday).
“The noticeable frivolous demand that had pervaded the market during the period of the lock down had been upturned by the lifting of the suspension.
“It is imperative to note that the road to price discovery in the market will be achieved as soon as Bureau de Changes resume operation to a more realistic rate of N405/$ in the month of May,” said Aminu Gwadabe, President Association of Bureax De Change Operators of Nigeria.
He enjoined the CBN to also resume the sales of forex to BDCs in order to achieve a better market price discovery and effective liquidity, Gwadabe also called on the apex bank not to relent in defending the Naira as well as infant industries.
The Director of Corporate Communications of the CBN, Isaac Okorafor, had stated that the apex bank had made preparations to resume forex sales to the BDC segment of the currency market once international travels resumed.
He said: “With these actions, the CBN wishes to reiterate that it is adequately meeting the needs of all legitimate users, and our continued capacity to do so should not be in doubt.
“There is therefore no need for panic by any end-user that could necessitate recourse to illegitimate sources and spike in foreign exchange rates.
“Given this, the bank has ramped up its surveillance of the foreign exchange markets for speculators, smugglers and other illegal users, and will take decisive actions against anyone/institutions involved in such nefarious activities.”