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Naira gains 9.7% against dollar at black market amid planned forex sales to BDCs

Naira appreciated substantially on the parallel market on Tuesday, rising by 9.65% to N435 against the United States dollar, traders said, citing the Central Bank of Nigeria’s plan to recommence foreign exchange sales to Bureau de Change (BDCs).

The apex bank had said in a circular on Thursday that it would resume forex sales to retail currency operators from 31st August and would sell $10,000 two times a week to each of the BDCs.

The local currency, which had depreciated to a low of N480 on the black market recently, rose from its previous trade of N477.

On the official market, supported by the CBN, the naira was quoted at N381, where it had remained stagnant since July. On the over-the-counter spot market, also known as the Investors and Exporters forex window, the currency traded at N386.03 against the dollar.

READ ALSO: Naira gains against dollar on black market

Currency markets in Africa’s biggest economy have been hobbled by dollar shortages after the pandemic outbreak spurred an oil price crash, slashing government revenues, weakening the naira and widening the country’s funding need.

Naira had been touching new loans on the black market since a 15% devaluation in March, happening about the same time the regulator called off dollar sales to the market due to the lockdown to flatten the curve of the coronavirus spread.

With the steep rise on Tuesday, traders are uncertain whether the CBN will be able to meet bloated demand on the currency that has built up following its suspension of forex sale. Reserves are declining while sales to international investors are yet to resume.

Ronald Adamolekun

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Ronald Adamolekun

Ronald Adamolekun is a creative writer with a mixed bag of experience in fields as diverse as data journalism, financial reporting and editing.

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