Naira gains, exchanges 430/$ as forex sale resumes

The naira sold for N430 to a dollar on Monday, gaining some strength over previous week’s sales figures, following the resumption of forex sales by the Central Bank of Nigeria on April 29, 2020.

After four weeks of forex sales suspension, the CBN resumed the provision of foreign exchange to all commercial banks for onward sale to parents wishing to pay schools fees and small businesses wishing to make essential imports needed to revamp economic activities across the country.

He said, “The partial lifting of the suspension on forex sales through the CBN announcement on school fees and the SMEs imports funding through the CBN window was what broke the camel’s back and a drive toward flattening the curve in the forex market, and led the naira to gain over 3.5 per cent strength over the dollars from an all high of N470/$ on Wednesday last week to N430/$ at the close of business today (Monday).

“The noticeable frivolous demand that had pervaded the market during the period of the lockdown had been upturned by the lifting of the suspension.

“It is imperative to note that the road to price discovery in the market will be achieved as soon as Bureau de Changes resume operation to a more realistic rate of N405/$ in the month of May.

“We the BDC operators urged the CBN to resume the sales of forex to the BDCs for a better market price discovery and effective liquidity to continue to defend the value of the naira and the infant industries.”

The Director, Corporate Communications, CBN, Isaac Okorafor, had stated that the CBN had made complete arrangements to resume foreign exchange sales to the BDC segment of the market for business travels, personal travels, and other designated retail uses, as soon as international flights resume.

He stated, “With these actions, the CBN wishes to reiterate that it is adequately meeting the needs of all legitimate users, and our continued capacity to do so should not be in doubt.

“There is therefore no need for panic by any end-user that could necessitate recourse to illegitimate sources and spike in foreign exchange rates.

“Given this, the bank has ramped up its surveillance of the foreign exchange markets for speculators, smugglers and other illegal users, and will take decisive actions against anyone/institutions involved in such nefarious activities.”