Nigerian Economy Getting Back to Africa's No.1? Surplus Dollars Flood Nigeria Market - CBN Reveals

The Central Bank of Nigeria (CBN) has revealed that the foreign exchange market with fresh $100 million dollars closed on Friday without selling off all the foreign currency released.

Surplus supply of dollars in Nigeria market

 

The surplus supply of dollars has again jolted speculators and caused a further increase in value of the Naira.

 

The foreign exchange market closed on Friday without selling off all the foreign currency released by the Central Bank of Nigeria (CBN).

 

Fresh 100 million dollars was released at the interbank market to meet customers’ demands, but the dealers were only able to pick about 81.35 million dollars, leaving surplus.

 

Mr Isaac Okorafor, the Acting Director, Corporate Communications, CBN, attributed the inability of authorised dealers to pick up the entire offer of the CBN to increasing dollar supply.

 

In a statement, he said another reason was the current sense of apprehension among dealers who anticipate a further crash in the rate of the dollar.

 

He reiterated the determination of the Bank to sustain its current interventions in the market.

 

“Those who doubt the capacity of the Bank to sustain the intervention in the FOREX market are beginning to have a change of mind,” he said.

 

The Naira has continued to sustain its ride against major currencies, especially the United States dollar, since CBN consistently pumped in more dollars.

 

The dollar exchanged at about N380 in Abuja, and N385 to N390 in Lagos.

 

At the Bureau De Change (BDC) window, the Naira was sold at N399 to the dollar, while the pound sterling and the Euro were sold at N500 and N400.

 

The Nigerian currency appreciated at the interbank market, closing at N307 to the dollar.

 

Traders believe that the continued intervention by the CBN have triggered further apprehension among speculators, who anticipate further losses given the continued crash of the dollar.

 

Some BDCs in Abuja stopped selling dollar due to the current price in order to curtail further losses, but they were opened to customers willing to sell at N370 to a dollar.

 

An Abuja-based BDC operator, said besides the dollar sales by the CBN, steady supply have been coming in from individuals who had once hoarded the currency for whatever purpose.

 

The President of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said that appreciation of the Naira, especially in Abuja though good, was causing panic among BDCs.

 

He said this was because the CBN presently sells dollars to BDCs at N381 per dollar, and expects them to sell to the public at N399 per dollar.

 

Gwadabe called attention to the sharp difference between the Lagos and Abuja parallel market exchange rates.

 

He said the Abuja market was smaller in terms of demand, being dominated by civil servants, while Lagos has higher demand as it service most private businesses in the country.

 

Experts are of the opinion that the dollar may likely sell even lower than N380 during the weekend as the future looks dim for the rise of the currency.