By Uche Amunike
In their bid to make extra efforts to strengthen the Naira, the Central Bank of Nigeria (CBN) has released more dollars to Bureau De Change operators, which has ended up making the Naira depreciate even further, against the United States Dollar at the official market on Tuesday, closing at N1,300 per dollar.
The CBN disclosed this information concerning the dollar sale in a new circular with reference number, TEM/FEM/PUB/001/013 which they uploaded to their website on Tuesday.
In the circular, which was signed by the CBN Director, Trade and Exchange Department, Dr. Hassan Mahmud, the apex bank stated that they were ready to sell $10,000 to BDCs at N1,021 per dollar and give directives that the operators should sell at a spread of not more than 1.5% above the CBN rate.
This new development allowed the naira to maintain a depreciation trend against the United states dollar on Tuesday, falling to N1,300 per dollar at the Nigerian Autonomous Foreign Exchange Market.
The new rate is currently N66 percent weaker than N1,234 per dollar which was recorded on Monday.
In summary, the foreign exchange transaction indicated that the intra-day high depreciated by N22 and closed at N1,317 per dollar from N1,295 per dollar. The intra-day low, however gained to N1000 from N1,050 per dollar. The total daily turnover increased to $133.65m from $110.17m on Monday.
Meanwhile, at the parallel market, the dollar was sold by currency traders between the rate of N1,300 and N1,320 on Tuesday, from the N1,260 recorded on Monday.
Recall that a few weeks ago, the CBN sold $10,000 to BDCs at a rate of N1,101 per dollar and mandated the BDCs to sell to eligible customers at a rate that does not exceed 1.5% above the purchase price.
This is the second time such an initiative has occurred in the month of April and the fourth time it is happening in 2024, thereby underlining the proactive strategy used by the CBN to manage currency volatility and ensuring that essential foreign exchange is available.
Recall that the Naira depreciated against the United States Dollar on Monday, reaching an exchange rate of N1,234 at the official foreign exchange market. This shows that there was a decline of N65 or approximately 5.26% from the previous rate of N1,169.99 which was recorded on Friday. This fluctuation in exchange rates might have notable implications for trade and economic stability.
The statement partly read: ‘We write to inform you of the sale of $10,000 by the CBN to BDCs at the rate of 1,021/$. The BDCs are in turn to sell to eligible end users at a spread not more than 1.5 per cent of the purchase price.’
This recent move became necessary after the CBN’s determination to continue to defend the Naira as stated by them earlier. The apex bank gave directives to all eligible BDCs to begin payment of Naira deposits into the designated CBN accounts from April 22, 2024. They have also asked the operators to submit evidence of payment and other documents to the appropriate CBN branches for disbursement.
