Nigeria’s currency outlook bright with new directive

REPORTS on Monday indicated that Nigeria’s currency may continue on its positive trend as currency traders were sold US dollars by the country’s central bank at a more favourable rate.

The central bank in return requested that the currency traders sell no more than 1,5 percent above the purchase price.

According to a CBN circular, BusinessDay, the Central Bank of Nigeria (CBN) instructed bureau de change (BDC) operators to sell the US dollar to eligible consumers for no more than 1,5 percent above the acquisition price.

The BDC operators had acquired the dollar for N1 251/US$, from the apex bank. This is in line with the bank’s promise back in February to sell US$20 000 weekly to BDCs for no more than N1 301.

“We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject wherein the CBN approved a second tranche of sale of FX to eligible BDCs.

“We write to inform you of the sale of US$10 000 to each BDC at the rate of N1 251/ US$1. The BDCs are to sell to eligible end users at a spread of not more than 1.5 percent above the purchase price,” the CBN circular reads.

“The summary of the forex auction showed that the naira appreciated by 1,64 percent as the dollar was quoted at N1 408.04 on Monday, stronger than N1 431.49 quoted on Friday at the Nigerian Autonomous Foreign Exchange Market (NFEM),” the BusinessDay’s report reads.

“Data from the FMDQ showed that the intraday high closed at N1 442 per dollar on Monday, stronger than N1 468/US$1 closed at on Friday. The intraday low closed flat at N1 300 per dollar on Monday as against N1 301 closed on Friday at NAFEM,” the report adds.

On Friday, the naira gained significantly, traded for N1,382 against the US$ at the official market. — Business Insider Africa