• Monday, February 26, 2024
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Abuja BDC operators resume operations as naira strengthens

Naira rides on CBN intervention to end week with 0.41% gain

…predicts dollar to decline next week

Bureau de Change (BDC) operators in Abuja resumed their operations on Friday after a strengthened naira led to a decline in dollar rates.

On Thursday, security operatives had swooped at the popular BDC market in zone 4, Abuja and prevented operators from buying or selling dollars due to the exorbitant dollar rates

The operators who spoke to BusinessDay, lamented that government was blaming their activities as part of the reason for the free fall of the naira.

But, in another visit to the market on Friday, BusinessDay observed that the operators who had deserted tenor selling spots have resumed operations. There was also no presence of security operatives unlike yesterday.

The operarors explained that security operatives had halted transactions on Thursday due to high dollar rates, however, with the rates now declining, they were allowed to resume buying and selling.

“Yesterday, security operatives stopped us from transacting because the dollar rate was so high. But the rate is declining and that is why they allowed us to buy and sell today”, Yusuf Umar, a BDC operator said, adding that they would be allowed to transact as long as the rates are not high.

Umar, also expressed confidence that the naira will further strengthen to below N1,000 /$ in the coming week.

“Sell your dollar now, because I tell you, the dollar will decline even more by next week from what we are seeing “, he added.

He later offered to buy dollar from these reporters for N1,390. Another Operator offered to buy for N1,350.

The naira which fell to a record low of 1,520/$ on Wednesday at the parallel market, commonly called black market, had strengthened ollowing the reforms by the Central Bank of Nigeria.

The naira appreciated to 1,400 per dollar on Thursday, according to data collated from the parallel market.

On Wednesday, the CBN ordered banks to reduce their excessive foreign exchange exposure by February 1 (Thursday) in a bid to shore up dollar supply. It said the net open position limit of banks’ overall foreign currency assets and liabilities both on and off-balance sheet should not exceed 20 percent short or zero percent long of shareholders’ funds unimpaired by losses, using the gross aggregate method.

The apex bank also removed the cap on exchange rates quoted by International Money Transfer Operators (IMTOs), allowing them to quote exchange rates for naira payout to beneficiaries using the prevailing market rates on a willing seller, willing buyer basis.