Naira gains as panic selling forces exchange rate to N465/$1

BY EMEKA EJERE

Information from Aboki fx has revealed that Nigeria’s exchange rate at the parallel market fell to N465/$1 on Monday evening. As at mid-day, the rate fallen to N470/$1 before falling further by evening..

Reports had it earlier in the day that panic selling among most forex traders was being fueled by the fear that measures imposed by the Central Bank of Nigeria (CBN), might leave them in losses.

Last week, the CBN, through a circular, directed operators of Bureau De Change (BDC), to sell dollars at N386, with a threat to meet non-compliance with sanction.

The directive followed the apex bank’s announcement of the resumption of gradual sales of foreign exchange to the BDCs to cater especially to the retail end of the market and travellers ahead of the planned commencement of international flight operations.

There are also other measures put in place by the apex bank in recent times to boost liquidity in the foreign exchange market and conserve forex. For instance, there is the banning of third parties from buying foreign exchange which is routed through Form M. This is to ensure prudent use of the country’s foreign exchange resources and eliminate incidences of over-invoicing, transfer pricing and others.

In the same vein, the CBN has threatened to clampdown on exporters who fail to repatriate their forex earnings. It directed banks to submit the names, addresses and Bank Verification Number (BVN) of all the exporters who have failed to repatriate their export proceeds for necessary sanctions.

Also in another forex liquidity boosting measure, the apex bank, last week, announced the resumption of gradual sales of foreign exchange to the Bureau De Change (BDC) operators to cater especially to the retail end of the market and travellers following the planned commencement of international flight operations.

The currency speculators appear to be quite apprehensive as they move to sell off their forex holdings, following fears that some of these measures will strengthen the naira in the coming weeks