Naira Watch: CBN injects additional $31m into BDC as Naira falls to N395

LAGOS—The Central bank of Nigeria (CBN) Wednesday,
intervened in the bureau de change (BDC) segment by
selling additional $31.3 million or $10,000 to 3,135
BDCs, even as the naira depreciated to N395 per dollar
in the parallel market.
Meanwhile, the nation’s external reserve rose by $21
million to $30.32 billion on Tuesday from $30.297 billion
at the end of last month.
Commenting on the additional dollar sales to BDCs,
Acting Director, Corporate Communication Department,
CBN, Mr. Isaac Okoroafor, said the special intervention
of $10,000 for BDCs was meant to meet the upsurge in
the forex requests of low-end customers, which has
been on the increase in the past few days.
He added that the special intervention does not in any
way, contradict the bank’s newly amended policy of
selling not more than $10,000 only to BDCs once a
week. He further explained that the intervention arose
due to the increasing demand for forex by Nigerians to
address other legitimate needs.
Okoroafor also disclosed to newsmen that the CBN is
collating retail requests from authorized dealers upon
which sale would be finalized.
President, Association of Bureaux De Change Operators
of Nigeria (ABCON), Alhaji Aminu Gwadabe commended
the CBN for the intervention. He said: The intervention
will help to checkmate the activities of currency horders
and speculators. It also reflects CBN’s determination to
continue to strengthen naira and get it out of the grasp
of speculators and hoarders.”
The sale of additional $31 million implies that the apex
bank has sold $62 million to BDC operators this week.
However, Vanguard survey revealed that the intervention
is yet to have appreciable impact on the fortunes of the
naira in the parallel market, where the exchange rate
yesterday rose to N395 per dollar from N393 per dollar
on Tuesday.
Investigation revealed that the parallel market exchange
rate dropped to N390 yesterday morning but
commenced a sudden upward movement by midday.
“We don’t really know what is behind the upward
movement of the rates today,” an Abuja BDC operator
told Vanguard on condition of anonymity.
But a BDC Chief Executive Officer, who spoke on
condition of anonymity, attributed the depreciation to the
decision of CBN which allows BDCs one week to sell
dollars purchased from the apex bank. He said: Some
BDCs instead of selling dollars purchased from CBN
yesterday, decided to keep some of them, with the hope
that the exchange rate might go up before the one week
expiration. It was just this evening that they started
selling when they heard that the CBN is going to sell
addition $10,000 to each BDC by tomorrow.”