Naira stabilises as CBN intervenes in FX market

Naira yesterday stabilised against the US dollar at the Bureau de Change (BDC) and parallel market following the sale of dollar to BDCs by the Central Bank of Nigeria (CBN).

Consequently, naira gained N1.00k/$ or 0.5 percent each at both the BDC segment of the foreign exchange (FX) and parallel market.

After trading on Thursday in Lagos, the local currency closed at N220/$ compared with N221/$ at the BDC segment and N222/$ as against N223/$ traded the previous day, BusinessDay findings show.

However, at the inter-bank market, it depreciated in value by N0.87k/$ or 0.44 percent, closing at N198.93k/$ from N198.06k/$ the previous day, according to data obtained from Financial Markets Dealers Quotations (FMDQ).

Nigeria’s central bank has increased its frequency of dollar sales to BDC operators from once to twice weekly since last week, raising support for the naira.

“We expect that the increase dollar liquidity at the bureau de change market and the tightening of the noose around dollar cash transfers across the board should help strengthen the local currency in the near term,” one dealer told Reuters.

Meanwhile, the Federal Government has approved a concessionary exchange rate of N160/$ for intending pilgrims for 2015 Hajj.

But for pilgrims buying above $1,000, the CBN said the difference should be bought at the prevailing naira exchange rate to US dollar on the day of purchase.

In a circular signed by Olakanmi Gbadamosi, director, trade and exchange department, CBN, the apex bank warned that no commission shall be charged by banks for sale of PTA to the intending pilgrim.