It is proving a rough week for the Niara as it depreciates further against the United States dollar at the official market on Tuesday, closing at 1,300/$. This came as the Central Bank of Nigeria stepped up efforts to stem the tide, selling more dollars to Bureau De Change operators (BDCs). The apex bank disclosed the dollar sale on its website on Tuesday, 23 April 2024 in a new circular referenced TEM/FEM/PUB/001/013, signed by the CBN director of trade and exchange department, Dr Hassan Mahmud.
The apex bank said it was set to sell $10,000 to BDCs at N1,021 per dollar and directed the operators to sell at a spread not more than 1.5 per cent above the CBN rate. Amid the development, the naira maintained a depreciation trend against the United States dollar on Tuesday, falling to N1,300 per dollar at the Nigerian Autonomous Foreign Exchange Market. The new rate is N66 per cent weaker than N1,234 per dollar recorded on Monday, 22 April.
A summary of the forex transaction showed that the intra-day high depreciated by N22, closing at N1,317 per dollar from N1,295. The intra-day low however gained to N1,000 from N1,051/$. While the total daily turnover increased slightly to $133.65m from $110.17m on Monday. At the parallel market, currency traders sold the dollar between the rate of N1,300 and N1,320 on Tuesday from N1,260 recorded on Monday.
Earlier this month, the apex bank sold $10,000 to BDCs at a rate of N1101/$ and directed the BDCs to sell to eligible customers at a rate not exceeding 1.5 per cent above the purchase price.This initiative represents the second such occurrence this month and the fourth instance this year, underlining the CBN’s proactive strategy in managing currency volatility and ensuring the availability of essential foreign exchange.
On Monday that the Naira depreciated against the United States dollar reaching an exchange rate of N1,234 at the official foreign exchange market. This represents a decline of N65 or approximately 5.26 per cent from the previous rate of N1,169.99/$1 recorded on Friday. The fluctuation in exchange rates can have significant implications for trade and economic stability. The statement read, “We write to inform you of the sale of $10,000 by the CBN to BDCs at the rate of 1,021/$. The BDCs are in turn to sell to eligible end users at a spread not more than 1.5 per cent of the purchase price.”
This recent move follows the CBN’s resolve to continue to defend the naira as stated by the bank earlier. The CBN directed all eligible BDCs to commence payment of naira deposit into the designated CBN accounts from April 22, 2024. It also asked the operators to submit proof of payment and other documents at the appropriate CBN branches for disbursement.
