After a long fluctuation in the money market, the nation’s local currency yesterday bounced back to recovery against the dollar which lead to new New Exchange Rate.
Naira vs Dollar and Exchange Rate
The Naira, on Monday, January 18, leaped to N296 per dollar in the parallel market due to expectation that the Central Bank of Nigeria (CBN) will sell autonomous dollar to bureaux de change this week.
Bureaux de change sources, who confirmed the explained that the appreciation was driven by expectation of inflow from the CBN.
President, Association of Bureaux de Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe,stated that while the expectation that CBN will start selling autonomous dollars to BDCs made the parallel market rate to fall to as low as N285 per dollar in the afternoon, the rate, however, rose to N295 towards the end of the day when expectation did not materialise.
Chief Executive Officer, H. J. Trust BDC also confirmed this development, saying: “There was rumour that the CBN will start selling to us, so nobody was willing to buy dollars, and this forced the rate to crash. But the rate went up again towards the end of the day.”
Last Friday, the CBN had pledged to explore the option of selling autonomous dollars sourced from oil firms to BDCs so as to address the sharp and stead depreciation of the Naira in the parallel market.
This was an outcome of a meeting held, yesterday, between the management of the CBN led by the Governor, Mr. Godwin Emefiele and the Executive Council of Association of Bureaux de Change Operators of Nigeria.
On Monday, the CBN stopped the direct sale of dollars to BDCs, a situation which triggered N35 depreciation of the Naira in the parallel market as the exchange rate in the market moved from N280 per dollar on Monday to N305 on Wednesday.
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