CBN Holds Forex Auction for Airlines, Fuel Marketers

• CBN Holds Forex Auction for Airlines, Fuel Marketers

The Central Bank of Nigeria (CBN) yesterday conducted special dollar auction sale to fuel marketers, manufacturers and airlines to clear matured foreign exchange obligations.

The companies are to bid through their banks for the dollars which are to be delivered in two months. In a notice to banks yesterday, the CBN said “Authorised dealers’ accounts with the central bank will be debited in full for the naira equivalent of the dollar bid amount on a spot basis. The central bank will settle the bids through forward settlements of two months.”

Also, the apex bank yesterday sold $31.35 million to 3,135 bureaux de change (BDCs), which prompted the naira to appreciate to N393 per dollar in the parallel market.

According to President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe said that the CBN sold $10,000 3,135 BDCs yesterday, and this boosted liquidity at the retail segment of the marker.

He said that this prompted the exchange rate to drop to N393 per dollar at the close of business yesterday. Vanguard survey of the parallel market revealed that prior to the dollar sales to BDCs, the parallel market exchange rate which rose by N7 on Monday to N397 per dollar, due to scarcity of dollars, rose to N400 per dollar in morning yesterday. But the rate commenced in downward shift by middle of the day as news of the dollar sale filtered into the market.

Gwadabe expressed optimism that the naira will further appreciate in the parallel market this week, saying, “We expect more liquidity in the market this week given the increased dollar inflows from International Money Transfer Operators (IMTOs).

Last week, the CBN, in continuation of its efforts to boost dollar supply increased weekly dollar sale to BDCs from $5000 per BDC to $10,000 per BDC. The apex bank also reduced the BDC exchange rate to N362 per dollar from N399 per dollar.