Naira Watch: CBN injects additional $31m into BDC as Naira falls to N395

LAGOS—The Central bank of Nigeria (CBN) Wednesday, intervened in the bureau de change (BDC) segment by selling additional $31.3 million or $10,000 to 3,135 BDCs, even as the naira depreciated to N395 per dollar in the parallel market
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Meanwhile, the nation’s external reserve rose by $21 million to $30.32 billion on Tuesday from $30.297 billion at the end of last month. Commenting on the additional dollar sales to BDCs, Acting Director, Corporate Communication Department, CBN, Mr. Isaac Okoroafor, said the special intervention of $10,000 for BDCs was meant to meet the upsurge in the forex requests of low-end customers, which has been on the increase in the past few days. He added that the special intervention does not in any way, contradict the bank’s newly amended policy of selling not more than $10,000 only to BDCs once a week. He further explained that the intervention arose due to the increasing demand for forex by Nigerians to address other legitimate needs. Okoroafor also disclosed to newsmen that the CBN is collating retail requests from authorized dealers upon which sale would be finalized. President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe commended the CBN for the intervention. He said: The intervention will help to checkmate the activities of currency horders and speculators. It also reflects CBN’s determination to continue to strengthen naira and get it out of the grasp of speculators and hoarders.” The sale of additional $31 million implies that the apex bank has sold $62 million to BDC operators this week. However, Vanguard survey revealed that the intervention is yet to have appreciable impact on the fortunes of the naira in the parallel market, where the exchange rate  yesterday rose to N395 per dollar from N393 per dollar on Tuesday. Investigation revealed that the parallel market exchange rate dropped to N390 yesterday morning but commenced a sudden upward movement by midday. “We don’t really know what is behind the upward movement of the rates today,” an Abuja BDC operator told Vanguard on condition of anonymity. But a BDC Chief Executive Officer, who spoke on condition of anonymity, attributed the depreciation to the decision of CBN which allows BDCs one week to sell dollars purchased from the apex bank. He said: Some BDCs instead of selling dollars purchased from CBN yesterday, decided to keep some of them, with the hope that the exchange rate might go up before the one week expiration. It was just this evening that they started selling when they heard that the CBN is going to sell addition $10,000 to each BDC by tomorrow.”