Naira Remains Resilient as CBN Sets to Resume FX Sales to BDCs

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Naira Gains as Traders Reduce FX Exposure ahead of CBN Auction

Naira Remains Resilient as CBN Sets to Resume FX Sales to BDCs

Nigeria’s local currency, Naira, maintained strong position this week amidst the apex bank plan to resume its weekly intervention sales.

On September 7, the Central Bank of Nigeria (CBN) says it will commence the sales of foreign exchange to the Bureau De Change (BDC) operators in the country.

The CBN made this known in a circular signed by Dr. Ozoemena Nnaji, Director Trade and Exchange Department, and addressed to authorised dealers and BDC operators on Thursday.Naira Remains Resilient as CBN Sets to Resume FX Sales to BDCs

The apex bank stated that the step was part of efforts to enhance accessibility to foreign exchange.

This is necessary particularly to travelers following the announcement of the limited resumption of international flights by Minister of Aviation.

“The CBN hereby wishes to inform the general public that gradual sales of foreign exchange to licensed BDC operators will commence with effect from Sept. 7.

“Consequently, purchase of FX by BDCs shall be on Mondays and Wednesdays in the first instance.

“The BDCs are to ensure that their accounts with the banks are duly funded with the equivalent naira proceeds on Fridays and Tuesdays accordingly”, the circular reads.

Meanwhile, CBN stated that authorised dealers of Deposit Money Banks shall continue to sell FX for travel related invisible transactions to customers and non-customers over the counter upon presentation of relevant travel documents, passport, air ticket and visa.

CBN said all authorised dealers and BDC operators are hereby advised to ensure strict compliance with the provision of the extant regulation on the disbursement of FX cash to travelers as any case of infraction will be appropriately sanctioned.

This week, the external reserves climbed 0.3% week on week to settle at $35.7 billion.

This is coming as Brent gained 4.3% week on week to settle at $45.6 per barrel, thus reflecting improved sentiment in the oil market.

CBN will sell FX to BDCs at ₦384.00/$1.00 in order to provide more dollar liquidity to the parallel market.

While the weekly sales volume is $10,000.0 per BDC, the CBN also directed BDCs to sell at a cap of ₦386.00/$1.00.

In the FX market, the naira remained resilient across the board this week.

At the official window, the CBN spot rate gained ₦2.00 to close at ₦379.00/$1.00. However, the parallel market rate remained sticky at ₦477.00/$1.00.

Afrinvest said following the intervention of the CBN at the parallel market, it expects gains for the local currency in the near term.

Naira Remains Resilient as CBN Sets to Resume FX Sales to BDCs

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