Naira bounces back after CBN unfolds plans to sell forex to currency operators

Posted by News Express | 29 August 2020 | 1,762 times

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By Chijioke Ohuocha

The Nigerian naira eased 1.3% against the U.S. dollar on the official market on Friday, a day after the central bank said it planned to resume forex sales to retail currency operators as the country reopens its airports for international travel.

The naira opened for trade at 385.50 per dollar on the market, supported by the central bank. It later recovered to close at 381 per dollar, where it has been stuck since July, Eikon Refinitiv data showed.

The central bank in a circular on Thursday said it will restart dollar sales to bureaux de change operators from Aug. 31 after it suspended auctions in March due to a coronavirus-induced lockdown and after a 15% devaluation.

It said retail traders cannot resell dollars bought from the bank at more than 386 naira.

The bank moved to unify the rates this month, bowing 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 whether the opening trade of 385.50 naira per dollar was carried out by the central bank. Bank officials were not immediately available for comment.

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% weaker on the unofficial black market patronised mostly by individuals at 477 naira.

The naira forward traded in London for the one-year settlement rose 3.64% to 478 on Friday. (Reuters)

Source: News Express

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