The CBN (Central Bank of Nigeria) recently conducted a special dollar auction sale to fuel marketers, manufacturers and airlines to enable them clear their matured foreign exchange obligations.
These companies are to bid through their banks for the dollars which will then be delivered in two months’ time. In a notice to banks yesterday, the Central Bank of Nigeria said “Authorised dealers’ accounts with the central bank will be debited in full for the naira equivalent of the dollar bid amount on a spot basis. The central bank will settle the bids through forward settlements in the next two months.” Also, the CBN yesterday sold $31.35 million dollars to 3,135 bureaux de change Operators (BDCs), which prompted the naira to appreciate to N393 per dollar in the parallel market.
According to President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, “the CBN sold $10,000 3,135 BDCs yesterday, and this boosted liquidity at the retail segment of the marker”.
Aminu Gwadabe said that this act prompted the exchange rate to drop to N393 per dollar at the close of business yesterday. A survey of the parallel market revealed that prior to the dollar sales to the Bureaux De Change operators (BDCs), the parallel market exchange rate which rose by N7 on Monday to N397 per dollar, due to scarcity of dollars, rose to N400 per dollar in morning yesterday. But the rate commenced in downward plunge by middle of the day as news of the dollar sale filtered into the market.
The President of the Association of Bureaux De Change Operators of Nigeria expressed optimism that the naira will further appreciate in the parallel market this week, saying, “We expect more liquidity in the market this week given the increased dollar inflows from International Money Transfer Operators (IMTOs).
Last week, the Central Bank of Nigeria, in continuation of its efforts to boost dollar supply increased weekly dollar sale to Bureaux De Change operators from $5000 per BDC to $10,000 per Operator; CBN bank also reduced the BDC exchange rate to N362 per dollar from N399 per dollar.