Naira stable at 454/$ as CBN asks BDCs to sell for 385/$1 – The Cable

Nigerian naira notes are seen in this picture illustration March 15, 2016 REUTERS/Afolabi Sotunde/Illustration

The Nigerian naira has remained around 454 to the greenback, as the Central Bank of Nigeria (CBN) asks the bureau de change operators to sell at 385/$1.

The BDCs are getting forex from official sources at 375 per dollar and are mandated to sell at 385 to end users.

About three weeks ago, the naira depreciated as low as 490/$1 and 601 to the British Pound.

Back then, Aminu Gwadabe, president of the Association of bureau de change operators of Nigeria (ABCON), had attributed the free fall to activities of Nigeria’s immediate neighbours.

“For the past few days, what we have been witnessing in the market is a kind of spike, a lot of volatility in exchange rate, and this has to do with fear,” Gwadabe had said.

“What I mean by neighbouring countries is that a lot of demand is coming from Benin Republic, from Chad. International demand is also accumulating; we see a lot of Chinese traders coming into the economy, mopping up any available dollar.”

The naira had since recovered, following a deal between the Travelex, an international money transfer agency, and the bureau de change operators.

The deal saw the naira firm from 490/$1 to 455/$1 in less than two weeks, and has remained stable, despite the suspension of 195 BDCs and major banks from participating in some segments of the forex market.

The CBN on Friday intervened in the forex market, with plans to clear a backlog of forex demand. This has made the naira firm at every segment of the market.

The naira closed at 304.75 to the dollar at the official side of the market on Wednesday, while also trading at 545 and 495 to the British pound and the Euro respectively, at the parallel market.