Foreign exchange market closed on Monday with naira appreciating to N378/$ from the earlier trading of N380/$ across Lagos. The Central Bank of Nigeria (CBN) on Monday sold about $100 million to 5,000 Bureau De Change (BDC) operators across the country.
Aminu Gwadabe, president, Association of Bureau De Change of Nigeria (ABCON), told BusinessDay that the operators access $75,000 from the International Money Transfer Operators (IMTO).
He said the CBN should continue to give assurance on maintaining adequate liquidity in the financial market, and described the CBN’s six policy measures to combat the impact of coronavirus on the economy as a good development.
The policy measures announced on Monday include the creation of a N50 billion credit facility for households and Small and Medium Enterprises (SMEs) hard hit by the coronavirus.
With strong bargaining power you can buy dollar at the rate of N377 at Eko Hotel and Festac areas of Lagos State. But in Apapa, the foreign currency traded at N380 per dollar in the morning.
Other policy measures announced by the CBN include interest rate reduction on all intervention funds from 9 percent to 5 percent per annum for one year, effective March 1, 2020, regulatory forbearance for deposit money banks, strengthening of Loan to Deposit Ratio (LDR) policy, credit support for healthcare industry and one year extension of moratorium for all CBN’s intervention facilities.
Last week, the CBN fined the BDCs N5 million for selling dollars to unauthorised users. On Thursday last week, the CBN issued a statement, saying that it has begun a robust and coordinated investigation in collaboration with the Nigerian Financial Intelligence Unit (NFIU) and related agencies to uncover the unscrupulous persons and FX dealers who are creating this panic, and the full weight of our rules and regulations will be meted out to them, including, but not limited to, being charged for economic sabotage.
“In light of current circumstances and macroeconomic fundamentals, the CBN has not devalued the Naira. Consequently, the CBN will invoke the full weight of applicable sanctions on any persons and authorized dealers found to be involved in such disruptive and speculative market behaviour,” the regulator said.
Naira exchanged at N410 per dollar last week on increased demand but later strengthened after the CBN ruled out any possibility of currency devaluation.
The Nigerian Treasury bill (NT-bills) market ended the trading session on a positive note on Monday, with average yields declining by 5 bps to 3.82 percent, while the average Open Market Operation (OMO) yields increased by 20 bps to 16.95 percent, according to a report by FSDH research.
