• Tuesday, December 05, 2023
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Naira gains 0.58% as banks compete to meet dollar demand


Nigeria’s currency on Monday strengthened further against the dollar, gaining 0.58 percent to N512/$ compared with N515 closed on Friday at the parallel market, widely known as the black market.

Naira fell sharply to N525 to the dollar last week after the Central Bank of Nigeria (CBN) announced that it would discontinue the sale of dollars to the Bureau De Change (BDC) operators due to foreign exchange arbitrage.

The local currency started firming up on Thursday, the following day after the Nigerian banks’ chief executives unanimously agreed to support and meet legitimate demand for dollars by the end-users.

Week-on-week, the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rose marginally by 6pbs to close at N411.44/$1 while the parallel market fell N13.00 w/w to close at N517.00/US$1.00.

Read Also: Naira ends week with 2.18% loss to dollar as market reacts to CBN’s policy

“We expect to see more depreciation in that space, in the short term as BDCs operators are likely to price higher following the squeeze. However, in the mid-term, we may see some appreciation if the CBN sustains the frequency of supply to the commercial banks,” analysts at Afrinvest Securities Limited said.

Meanwhile, Nigerian deposit money banks have been sending messages to their customers asking them to visit their branches with complete documentation for foreign exchange purchases.

Access Bank Plc said customers will receive forex in cash for Personal Travel Allowance (PTA), Business Travel Allowance (BTA) requests, while the beneficiary will be credited offshore for school fees and medical bills payments.

Requirements for accessing PTA and BTA include: age limit of 18 for an applicant, a holder of Nigerian passport, journeys of more than five hours flight time originating from Nigeria, sales of PTA/BTA shall be for travel to be undertaken not more than 14 days from the day of purchase of the dollar.

“Life can be filled with so many uncertainties and challenges however, getting up to $4,000 as your Personal Travel Allowance (PTA) and $5,000 for your Business Travel Allowance (BTA) quarterly shouldn’t be stressful if you meet these criteria,” First Bank of Nigeria said in a note to customers.