Nigeria’s currency outlook seem bright with the CBN’s new FX directive

According to a CBN circular, as seen in the business news publication, 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% above the acquisition price.

The BDC operators had acquired the dollar for N1,251/$, from the apex bank. This is in line with the bank’s promise back in February to sell $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 $10,000 to each BDC at the rate of N1,251/$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/$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 Nigerian currency gained significantly, traded for N1,382 against the US dollar at the official market, which came off the heels of the cleared foreign exchange backlogs by the Central bank, worth about $7 billion.

This highlighted that in the past few weeks, the Naira had gained N500 against the US dollar from its record low this year at the black market.

However, on Monday, the Naira fell to N1,450/$, an increase of 2.07% from its last trading rate as dealers unloaded their hoarded foreign currency on the black market.