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Monday, May 16, 2022

Nigeria’s naira appreciates to N515/$, its 2nd consecutive day gains vs dollar

By Oludare Mayowa

The Nigerian naira further strengthened to N515 to the dollar on Friday from N520 to a dollar the previous day at the parallel market, traders said.

The local currency appreciated for the second consecutive day after the initial reaction to the Tuesday’s Central Bank of Nigeria (CBN) decision to suspend dollar sales to the Bureau de Change operators.

The naira had weakened against the greenback shortly after the CBN announced that it was suspending dollar sales to BDCs over sundary allegations of malpractices.

By Wednesday, the naira had lost about 4.16 percent against the dollar on the parallel market, shedding N21 to the dollar to close at N525 a dollar.

However, on Thursday, the local currency reversed its two consecutive day loss against the dollar on the parallel market, gaining 0.95 percent to close at N520 to a dollar.

At the close of market on Friday, the naira also regain some of the losses, narrowed down the loss since the CBN announcement to 2.18 percent from the previous 4.16 percent.

Analysts attributed the quick reversal of the naira loss to the decision of the bank chief executives to support the new CBN forex policy and ensure that retail endusers get the greenback without much stress.

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The CBN has directed all Deposit Money Banks (DMBs) to set up teller points at designated branches across the country to fulfil legitimate forex requests for Personal/Business Travel Allowances (PTA), tuition fees, medical payments, SMEs transactions, amongst others.

Banks are also required to establish electronic application and alert systems to update customers on the status of their forex requests.

On Thursday,  Body of Bank Chief Executive Officers (CEOs) led by Herbert Wigwe of Access Bank said banks would ensure full compliance with the CBN directives in order to ensure FX stability.

He said customers could walk into their banks to purchase dollars for legitimate transactions.

According to him, banks that fail to set up foreign exchange desk to handle disbursement of foreign currencies to small users in accordance with the regulatory bank’s directive will be sanctioned.

Also on Thursday, the the Association of Bureaux De Change Operators of Nigeria (ABCON), led by its president, Aminu Gwadabe said it will engage with the apex bank to address and resolve all the issues that led to the recent action, including identification and sanctioning of earring BDCs, where necessary.

It, however, said that the suspension of dollar sales by the CBN would not stop the forex retailers from conducting their services in line with their operating licenses and guidelines.

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