Forex dealers fear further dollar slump as CBN offers $100m

The Central Bank of Nigeria on Thursday offered  the sum of $100 million to meet the requests of wholesale customers, out of which $91 million was taken, indicating greater apprehension among dealers who anticipate a further crash of the dollar in the FOREX market.

The Acting Director of Corporate Communications at the CBN, Isaac Okorafor, said that the dealers will have value for their respective bids on Friday, March 24, 2017.

Okoroafor further disclosed that the highest and marginal bid rates were N330/$1 and N320/$1, respectively, Okorafor said no intervention was made by the Bank to meet requests for invisible on Thursday.

According to reports,  though the exchange rate of the Naira in the Lagos segment of the parallel market stabilised between N400 per dollar and N405 per dollar on Thursday, the rate in Abuja fell to a record low of N385 per dollar due to increased dollar inflows.

 President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe,  said that appreciation of the Naira to N385 per dollar in Abuja though a good development is causing panic among BDCs because the CBN presently sells dollars to BDCs at N381 per dollar, and expects them to sell to the public at N399 per dollar. He said the problem now is that customers are using the Abuja parallel market rate as reference for dollar purchase.

“They insist they cannot buy at N400 per dollar when the dollar is going for N385 per dollar in Abuja”, he said. Explaining why the sharp difference between the Lagos and Abuja parallel market exchange rates, Gwadabe said: “The Abuja market is smaller in terms of demand than the Lagos market, and it is also dominated by civil servants. Lagos is where most of the demand is”.

This situation, it was gathered has prompted some BDCs to suspend buying dollars from members of the public while others insist on buying from the public at N380 per dollar. However, speaking on condition of anonymity, an Abuja-based BDC operator, said Naira’s appreciation in the Abuja market is due to increased dollar inflow. He said besides the dollar sales by the CBN, supply has been coming from people who had hoarded the currency for speculative purposes.

He said: “When they bring such dollars, we refuse to buy from them except they agree to sell at N380 or below because we knew they had kept the dollars all this while for speculation”.

Source: The Nigerian Voice (business)