CBN moves to rescue naira with $90m

In from Ali Smart . . .
As part of efforts to curtail prevailing naira volatility in the market, the Central Bank of Nigeria (CBN) has hinted of plans to pump $90million into the forex market on Wednesday to shore up money supply.

The local currency had last week, exchange at N280 against the greenback after the CBN supplied only $23 million to Bureaux De Change (BDC) operators, $67 million short of the expected $90 million.

The president, Association of Bureaux De Change Operators of Nigeria (ABCON) Alhaji Aminu Gwadabe said the development is heartwarming as it is expected to prevent a repeat of last week’s crisis.

“I think the CBN has learnt its lessons and will supply $90 million to the market, which translates to $30,000 for each of the 3,000 BDCs. That is the only way the naira is beginning to rebound in the parallel market. It is currently exchanging at N263 to dollar in Lagos and N263 to dollar in Abuja,” he said.

Read also: Analysis… Diminishing value of naira: Whodunit?

The parallel or black market has been sustained by the significant differences in the naira exchange rates against international currencies. With nearly N70 gap between the official rate and the parallel market rate, there has been a lot of room for players to make easy profit.

Gwadabe also said the high level of forex volatility recorded in the parallel market last week, was fuelled by the inconclusiveness of the CBN’s plans to permanently stop supplying dollar to the BDCs.

He observed that the market volatility was also worsened by banks recalling loans given to forex speculators as the year gradually runs to an end.

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