• Saturday, June 22, 2024
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Dollar crashes to N1,200 on black market after CBN reviews BDCs’ rate

Dollar crashes to N1,200 on black market after CBN reviews BDCs’ rate

The naira has maintained its appreciation on the official and unofficial market, strengthening to 1,200 on the black market after the Central Bank of Nigeria (CBN) adjusted downward, the rate it sells to the Bureau De Change Operators.

The current rate showed a 3.33 percent appreciation over the level of N1,240 per dollar exchanged on Friday at the parallel market, also called the black market.

“Plenty of dollars are in the market now and demand is low. Also, the CBN has brought down the rate for the BDCs,” one trader told BusinessDay on Monday.

With the current rate, the naira has gained 52.08 percent (N625) of its value against the dollar on the black market according to the rates collated from various street traders and trading platforms.

The Central Bank of Nigeria (CBN) on Monday reviewed the exchange rate for the Bureau De Charge (BDC) Operators to N1,101 per dollar from N1,251/$1 as it plans to sell $15.88 million to 1,588 eligible BDCs.

In a letter addressed to the president of the Association of Bureau De Change Operators of Nigeria, the CBN announced the sale of $10,000 to the BDC operators at an exchange rate of N1,101 per US dollar.

This development aims to address retail market demand for eligible invisible transactions. The letter, signed by W.J. KANYA on behalf of the director of the trade and exchange department, outlines the directive for BDCs to sell the acquired forex to eligible end-users at a spread not exceeding 1.5 percent above the purchase price.

This measure is intended to facilitate access to foreign exchange for legitimate transactions within the retail market.

The Naira, on Friday, closed flat, recording a marginal appreciation of 0.32 percent against the dollar on the official foreign exchange (FX) market.

This was supported by increased dollar supply by willing buyers and willing sellers at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

After trading on Friday, one dollar was quoted at the rate of N1,251.05, stronger than N1,255.07/$1 recorded on Thursday at the NAFEM, according to the data obtained from the FMDQ Securities Exchange.

Dollar supply increased by 78.62 percent to $248.27 million on Friday from $138.99 million recorded on Thursday.

The summary of the FX auction showed that the intraday high strengthened to N1,281 per dollar, stronger than N1,284 quoted on Thursday. The intraday low fell to N1,220 per dollar, weaker than N1,200 closed on Thursday.

The naira on Friday appreciated to 1,245 per dollar on the parallel market, stronger than the rate at the official and Bureau De Change (BDC) segment of the FX market

A report by Comercio Partners noted that the value of the Naira to the dollar strengthened by 446 bps week-on-week to print at N1,251.05/$ this week at the NAFEM window.