The sell rate of the naira appreciated significantly to N357 to a dollar on the parallel market Thursday, from the N359 to a dollar it was the previous day, as demand for the United States currency continued to weaken.
Checks by newsmen also showed that the buy rate of the greenback strengthened to N359 to a dollar, as against the N360 it was previously.
This is just as Nigeria’s external reserves sustained its accretion, closing at $47.798 billion on Wednesday.
The current value of the reserves represented an increase by $326 million, compared with the $47.472 billion it was as of June 4, 2018.
Currency dealers attributed the gains recorded by the naira to the saturation of the market with dollars by the Central Bank of Nigeria (CBN).
The central bank had in May, directed all Bureau De Change (BDC) operators to always access forex from it on Mondays, Wednesdays and Fridays, every week.
Owing to this, dollar supply has increased tremendously.
Speaking in a chat with newsmen, the President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, explained: “Demand is weak and as you know there have been a lot of interventions in the market. Also, there is no naira liquidity. Normally it is naira liquidity that chases the dollar.
“Most of the frivolous demand in the market has been stamped out. Also, don’t forget that every weak, the CBN intervenes in the interbank forex market as well.
“They have used that avenue to mop-up most of the naira liquidity in the market and by doing that, forex speculators have been exhausted.”
In a bid to create more forex liquidity in the market and uplift the value of the naira, the CBN had warned that any BDC that fails to access the market three time a week would face sanctions, and risks losing its operating licence, according to the new order which was also aimed at clamping down on forex hoarding.
“All BDCs shall henceforth access forex from the CBN on Mondays, Wednesdays and Fridays. It is compulsory that all BDCs access forex at least three times weekly,” the CBN said in a mailed statement at last weekend, insisting that compliance is compulsory.
“Any BDC that fails to access the forex window at least three times weekly shall have its licence reviewed by the CBN,” it added.
In the new directive, the CBN had also mandated banks to henceforth, sell forex to travellers across the counter as long as they present valid documents that prove their eligibility.
“All travellers shall be attended to immediately at the banks’ counters. Any contravention shall be sanctioned by the CBN,” it had warned.
The bank’s Acting Director, Corporate Communications Department, Mr. Isaac Okorafor, reassured members of the public that the bank would continue to intervene in the forex market in line with its quest to sustain liquidity and maintain stability.
Meanwhile, the CBN has been on a roadshow in the past one week, sensitising local businesses importing goods from China to use the yuan instead of the US dollar in its effort to support its naira currency and boost reserves.
To this end, central bank on Wednesday held a town hall meeting with businesses in Lagos to introduce the yuan for imports from China ahead of plans to start auctioning the Asian currency later this month.