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.
- NSE: Market closes bigger on improving investors’ confidence - September 28, 2020
- Oil prices dip as coronavirus cases surge dims prospect; Bonny Light gains $0.13 - September 28, 2020
- Nigerian govt to privatise NNPC, scrap major oil & gas regulatory agencies under proposed bill - September 28, 2020