Nigeria’s currency, Naira has strengthened by N3 against the American dollar at the parallel market,
The local currency which had remained unchanged for two days at
However, it gained strength to trade at N375/$1 in the early hours of today, July 26.
The growth comes on the heels of the report that the Central Bank of Nigeria (CBN) will resume dollar sales to Bureau De Change operators.
Currency traders had said that the poor performance of the Naira was due to persistent liquidity issue.
They advised the federal government and the CBN to consider alternative policy options to halt the currency’s decline.
Their outcry may have prompted the CBN’s decision to issue a directive authorizing agent banks to allow the sale of foreign exchange to BDC operators, from there to international money transfer operators on Friday, July 22.
A Lagos BDC source told News reporters “A lot of dollar came into the market today because there are reports that the CBN will commence sales of dollar to us. So those who have hoarding are now selling, hoping to get back from CBN.”
We recall that CBN had in January, suspended dollar sales to BDCs due to decline in the country’s foreign exchange earnings, and sharp practices by BDCs.
The apex bank however last month floated the naira as it introduced the foreign exchange policy, which allows for the determination of the exchange rate by market forces of demand and supply.
But in spite of the policy shift, scarcity of dollar has not allowed naira any respite as demand for dollars always outstrips supply.