Amid forex scarcity dollar sells for N445
Amid scarcity of foreign currency, the naira exchanged at N445 against the dollar in the parallel market on Monday.
Analysts attributed the development to scarcity and shrinking liquidity in the forex market.
The president, Association of Bureax De Change Operators of Nigeria, Aminu Gwadabe, attributed the development partly to the extension of airport lockdown across the country. The extension further affected the access to forex by the bureau de change operators, he explained.
Last week, as part of efforts to curtail the spread of coronavirus, the Nigerian government extended the ban placed on flights in the country.
“The extension of airport lockdown as well as sale of forex to the BDCs pending when air travels resume has impacted the naira negatively from N425/$ to $445/$ in the parallel market,” Mr Gwadabe was quoted as saying on Monday by Punch newspaper.
“However, the assurances of the CBNgovernor to foreign investors on ease of exit have helped to flatten the curve at N445/$ without any sign of further depreciation at the close of business today.
“The persistent dollar scarcity with shrinking liquidity in the market is one of the major unintended consequences of the shutdown of the BDCs window.”
However, banks have commenced forex sales to customers wishing to pay school fees as well as small businesses operating across the country.
In March, this newspaper reported how the Central Bank of Nigeria(CBN) suspended foreign exchange sales to Bureau De Change (BDC) operators until further notice. The CBN announced the suspension of the sale to BDCs in a letter dated March 25, 2020.
The CBN noted that the suspension followed the government’s directive to restrict gatherings to not more than 20 persons as part of measures aimed at reducing person-to-person contact and curbing the transmission of the coronavirus (COVID-19).
In April, the CBN resumed the provision of foreign exchange to commercial banks. The Apex bank said the resumption of the exercise was for onward sales to small and medium enterprises (SMEs) wishing to undertake the importation of essentials needed to help revamp the economy devastated by the deadly coronavirus pandemic.
In a statement by its spokesperson, Isaac Okorafor, the CBN said it also took into consideration the interest of parents who may need foreign exchange for the payment of their children’s school fees in view of the gradual easing of the COVID-19 lockdown announced by President Muhammadu Buhari on Monday.
In particular, the CBN said it was resuming with the provision of over $100 million per week for both categories.
Amidst scarcity on Monday, ABCON stated that it was important for the CBN to resume the sale of forex to the BDCs in order to defend the value of the naira and industries.
As of 10 am on Tuesday, data gathered from the parallel market showed that the naira exchanged against the dollar at N445; against the British pound at N535; and against the Euro at N455.