Dollar slumps to N385 as CBN injects $100m into interbank market

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Traders in Abuja and Lagos yesterday purchased United States dollar at the rate of N385, indicating greater apprehension among dealers and speculators.

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The traders said the naira continues to firm up against major currencies, due to the consistent supply to the market by Central Bank of Nigeria.

 

The CBN Action

The Central Bank of Nigeria, CBN, on Thursday injected another $100 million to meet the requests of wholesale customers.

Out of the amount, about $91 million was taken by buyers.

Close followers of the foreign exchange market said on Thursday that the speed at which customers swooped on the available supply was indicative of the growing apprehension by forex dealers who are anxious to dispose the stock at their disposal in anticipation of a further crash in the dollar value in the market.

“Since the CBN began its direct supply of dollars to the interbank market, there has been so much uncertainty. Nobody seems to know what is going to happen the next moment with the value of the dollar.

“We the dealers are anxious to dispose whatever we have at our disposal, because we do not want to suffer a loss,” Auwal Mustafa, a forex dealer in Wuse Zone 4 in Abuja said on Thursday night.

The Central Bank spokesperson, Isaac Okorafor, said the dealers would have value for their respective bids on Friday, March 24, 2017.

Mr. Okorafor said the highest and marginal bid rates were N330 to the dollar and N320 to the dollar, respectively.

He said no intervention was made on Thursday by the Bank to meet requests for invincibles, including basic and personal transport allowance, school fees and medical fees by customers.

Meanwhile, reports in Abuja and Lagos on Thursday showed that the Naira continued to firm up against major currencies, especially the dollar.

Some customers said they bought from the streets at the rate of N390 to the dollar, a development that stirred apprehension among speculators, who anticipate huge losses in the face of continued reduction in dollar value.

During the last Monetary Policy Committee meeting in Abuja, the CBN Governor, Godwin Emefiele, told reporters the Bank would sustain its forex intervention efforts.

He said he was optimistic the exercise would lead to the convergence of the forex rates between the interbank and the bureau de change rates.

Panic in Bureaux De Change Operators of Nigeria
Confirming this development to Naija247news in a phone chat, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe said that appreciation of the Naira to N385 per dollar in Abuja though a good development is causing panic among BDCs because the CBN presently sells dollars to BDCs at N381 per dollar, and expects them to sell to the public at N399 per dollar.
He said the problem now is that customers are using the Abuja parallel market rate as reference for dollar purchase. “They insist they cannot buy at N400 per dollar when the dollar is going for N385 per dollar in Abuja”, he said.
Explaining why the sharp difference between the Lagos and Abuja parallel market exchange rates, Gwadabe said: “The Abuja market is smaller in terms of demand than the Lagos market, and it is also dominated by civil servants. Lagos is where most of the demand is”.
This situation, it was gathered has prompted some BDCs to suspend buying dollars from members of the public while others insist on buying from the public at N380 per dollar. However, speaking on condition of anonymity, an Abuja-based BDC operator, said Naira’s appreciation in the Abuja market is due to increased dollar inflow.

He said besides the dollar sales by the CBN, supply has been coming from people who had hoarded the currency for speculative purposes. He said: “When they bring such dollars, we refuse to buy from them except they agree to sell at N380 or below because we knew they had kept the dollars all this while for speculation”.

Peter Okafor
Peter Okaforhttp://Naija247news.com
Peter Okafor Financial Journalist | Editor | Contributor Overview: Peter Okafor is a seasoned Financial Journalist, astute Editor, and valued Contributor at Naija247news Media Group. With an unwavering passion for dissecting complex financial landscapes, Peter has become a trusted name in delivering incisive and insightful coverage of economic events, market trends, and corporate dynamics. Professional Journey Peter's journey in financial journalism has been marked by a commitment to excellence. Joining the ranks of Naija247news, he has consistently demonstrated a keen understanding of the intricate interplay between finance and the global socio-economic fabric. Expertise: Specializing in financial markets, economic analyses, and business developments, Peter Okafor has honed his expertise over the years. His ability to unravel intricate financial narratives and present them in a comprehensible manner sets him apart in the world of financial journalism. Contributions As an Editor and Contributor, Peter has played a pivotal role in shaping the narrative of Naija247news. His contributions extend to thought-provoking articles, in-depth market analyses, and coverage of key events that impact the financial landscape. Educational Background: Peter holds a degree in Journalism, complemented by specialized courses in Finance and Business Reporting. His educational foundation has provided him with the tools to navigate the intricate world of financial journalism. Innovation and Adaptability: In an era of evolving media landscapes, Peter Okafor exemplifies innovation and adaptability. Leveraging digital platforms and emerging technologies, he ensures that financial insights reach a diverse audience, fostering financial literacy and awareness. Awards and Recognition: Peter's commitment to journalistic excellence has not gone unnoticed. He has been the recipient of several awards, recognizing his outstanding contributions to the field of financial journalism. Vision for the Future: Looking ahead, Peter Okafor envisions a future where financial journalism continues to empower individuals, shape economic policies, and drive positive change. His dedication to staying at the forefront of financial news underscores his commitment to this vision. Connect with Peter Okafor: - LinkedIn: [Peter Okafor](#) - Twitter: [@PeterOkafor_N247](#) In the dynamic realm of financial journalism, Peter Okafor stands as a stalwart, combining experience, expertise, and a forward-looking vision to illuminate the path of financial understanding for a global audience.

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