Naira now 221 as CBN sells dollars

The naira on Wednesday appreciated to 221 from 224 against the dollar at the parallel market after the Central Bank of Nigeria sold about $80m to Bureaux de Change operators.

The United States currency was sold to the BDCs at N197, helping the naira to strengthen at the black market.

On the interbank market, the naira ended at the bank’s pegged rate of 197 to the dollar.

The Acting President, Association of Bureaux de Change Operators, Alhaji Aminu Gwadabe, told Reuters that the central bank had started to sell dollars twice weekly to BDCs since last week.

The naira had dropped against the dollar at the parallel market on Tuesday driven by demand mainly from individuals travelling abroad for summer holidays and importers.

The local currency was quoted at 224 to the greenback at the black market, 0.89 per cent weaker than 222 it was sold on Monday, Reuters reported.

At the official interbank market, the naira closed at 197, a level it has been stuck at following the Central Bank of Nigeria’s peg on the exchange rate in February.

“We’ve seen a surge in dollar demand … since Friday,” a Nigerian Bureaux de Change operator, Harrison Owoh, said, adding that the CBN might sell dollars this week.

Owoh said the bank sold around $160m to BDCs last week to increase dollar supply.

BDCs are allowed to sell up to $4,000 as personal travelling allowance and $5,000 as business travelling allowance.

However, individuals sometimes buy above the stipulated dollar limit from the undocumented parallel market.

The naira had appreciated to 216 at the parallel market last week after banks stopped accepting hard currency cash deposits on CBN orders, fuelling excess dollar liquidity at the parallel market.

The central bank has also directed lenders to pay for dollars purchased at the official market 48 hours in advance, tightening naira liquidity.