CBN to resume forex sales as lockdown eases

The Central Bank of Nigeria (CBN) said Wednesday it had resumed sale of dollar to commercial banks in the country in view of the gradual easing of the coronavirus lockdown.

It said in a statement seen by Reuters that it would sell $100 million every week to assist people with dollar expenses abroad including foreign school fees payment and small businesses seeking to import essentials required to revamp economic activities.

Demand for the dollar has been growing and putting much strain on the Naira in recent times with the Naira falling to N460 per dollar at the parallel market on Tuesday as scarcity worsened.

Importers having past due obligations are jostling for hard currency while foreign exchange providers like offshore investors have exited.

President Muhammadu Buhari announced lockdown in the FCT, Lagos and Ogun States last month to contain the spread of COVID-19, causing the CBN to run severely minimal services as currency traders worked from home.

The central bank said it had made arrangements to resume forex sales to Bureaux De Change the moment international travel resumed, warning against currency speculation which could trigger an increase in exchange rates.

READ ALSO: Oil prices rally as Nigerian crude sells below $10

The Naira has been plumbing new lows on the over-the-counter spot and black markets after the CBN weakened the currency in March and stopped the sales of dollar to retail currency traders due to COVID-19 restrictions.

Investors are sceptical of the CBN’s ability to defend the Naira amidst declining external reserves and the current oil price slump.

Sell off of equities have halted as foreign investors wanting to exit the Nigerian stock market got trapped due to a lack of dollars.

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