Naira Exchanges at N430/$ as CBN Resumes FX Sales

• Naira Exchanges at N430/$ as CBN Resumes FX Sales

The Nigerian Naira gained on Monday following the Central Bank of Nigeria’s announcement that it has commenced the sales of foreign exchange to small businesses and parents wishing to pay their kids’ school fees.

The CBN had suspended forex sales to Bureau De Change operators in line with the Federal Government directive on COVID-19 lockdown about four weeks ago.

The apex bank, however, announced on Monday that it has resumed the sales of forex to commercial banks for onward sale to parents looking to pay their children school fees abroad and small businesses in need of imported goods for their businesses.

Alhaji Aminu Gwadabe, the President, Association of Bureaux De Change Operators of Nigeria, explained that the easing of restrictions helped to flatten the curve in the forex market.

Gwadabe stated that the Naira was exchanged as higher as N470 to a US dollar on Wednesday last week before the CBN announcement on forex sales resumption moderated forex exchange to N430 on Monday.

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.”