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Naira gains 1.3 per cent after CBN unveils plans to sell forex to BDC operators

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THE naira appreciated by 1.3 per cent against the US dollar on the Nigerian official market on Friday, after the Central Bank of Nigeria (CBN) announced plans to resume forex sales to Bureau De Change (BDC) operators.

The naira opened for trading at N385.50 per dollar in the market, which is the official rate supported by the CBN. It later recovered to close at N381 per dollar, where it has been stuck since July, according to data from Eikon Refinitiv.

The CBN had in a circular titled ‘Resumption of sales to Bureau De Change operators’,  announced that dollar sales to BDC operators would commence from August 31, after it suspended sales in March due to a coronavirus-induced lockdown and after a 15 per cent devaluation.

“Consequently, the purchase of foreign exchange by BDCs shall be on Mondays and Wednesdays in the first instance. The BDCs are to ensure that their accounts with the banks are duly funded with the equivalent naira proceeds on Fridays and Tuesdays accordingly,” a section of the circular reads.

“Meanwhile, authorised dealers (Deposit Money Banks) shall continue to sell foreign currencies for travel-related invisible transactions to customers and non-customers over the counter upon presentation of relevant travel documents (passports, air tickets and visas).”

BDC dealers cannot resell dollars bought from CBN at more than N386, as the apex bank moved to unify the rates yielding to pressure from international lenders to merge its multiple exchange rates, eliminating arbitrage which has cost the country billions in reserves as it tried to defend the naira.

It was not clear if the opening trade of N385.50 per dollar was carried out by the CBN.

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With the early deal, the naira traded close to the over-the-counter spot market, widely quoted by investors and importers but it was still 20 per cent weaker on the unofficial black market patronised mostly by individuals at N477.

Amos Abba is a journalist with the International Center for Investigative Reporting, ICIR, who believes that courageous investigative reporting is the key to social justice and accountability in the society.

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