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Topic Summary

Posted by: Everest
« on: March 15, 2017, 12:57:20 AM »

The naira yesterday depreciated to N458 per dollar in the parallel market due to uncertainty over dollar sales to bureaux de change (BDCs) by the Central bank of Nigeria (CBN).

Meanwhile the apex bank yesterday concluded arrangement to release into the foreign exchange market $195 million comprising of $150 million for wholesale auction and $45 million to meet demand for invisible items like such as medical fees, tuition fees, Personal Travel Allowance (PTA) and Business Travel Allowance (BTA).

On Monday the naira had appreciated by N6 per dollar in the parallel market due to expectation that the CBN might increase dollar sales to BDC by 142 per cent this week.

But this expectation turned to disappointment yesterday as the CBN maintained the same amount of $8,000 per BDC.

This according to a BDC operator triggered increased demand for dollars in the parallel market with the parallel market exchange rate rising top N458 per dollar at the close of business yesterday from N454 on Monday.

Confirming the injection of $195 million by the apex bank, the CBN Acting Director, Corporate Communications, Isaac Okorafor, said that the bank acted promptly and proactively in line with its promise to keep the market liquid enough to meet the needs of genuine requests.

Okorafor also alluded to the fact that deposit money banks (DMBs) were becoming saturated with foreign exchange as most of them are now able to meet demands for foreign exchange within the stipulated time frame.

”As you can see, all the pent-up demand for invisibles have been met to the extent that banks are urging customers to come and obtain forex”, he said.

The spokesman CBN reiterated the Bank’s determination to continue to fund the importation of raw materials and plant and machinery for manufacturing, agriculture, and other eligible items.

He also assured that the Bank remained resolute in ensuring stability in the forex market by keeping an eagle eye on the activities of authorised dealers in order to ensure sharp practices are reduced barest minimum.

Since Monday February 20th 2017, when it announced new measures to boost dollar supply and forestall the declining fortunes of the naira in the parallel market, the CBN has injected $1.3 billion dollars by intervening in the forex market seven times as follows: Tuesday February 21st, $417 million; Thursday February 23rd, $231 million; Monday February 27th, $180 million; Friday March 3, $350 million; Monday March 6, N367 million; Tuesday march 7, $100 million and on Thursday March 9, $195 million.

Also during the week, the CBN increased weekly dollar sales to Bureau De Change (BDCs) by increasing the number of BDCs that have access to the dollar sales to 3,114 from about 2000.

Source: Vanguard