The dollar yesterday crashed to N368/$ in the parallel market, after over three weeks at N382/$, representing N14 appreciation within the period.
The exchange rate, which was confirmed by Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), followed nearly $5 billion sustained intervention by the Central Bank of Nigeria (CBN) in the interbank market since February.
He said the effectiveness of the CBN’s dollar injections in the interbank and the stability in the market require that the regulator reviews the rate band for bureaux de change (BDCs) downwards from N360/$ to $340/$.
Gwadabe said the naira has remained stable across the board in the near term on increased dollar supply to both the official interbank window and the black market. It has been trading around N382/$ on the parallel market in the last two weeks, while at the interbank market the naira was trading at around N305.40/$.
He said there is rapid elimination of speculation in the forex market. “The creation of SMEs and exporter/investors windows are helping to stabilize the naira. Also, the $40,000 weekly dollar interventions to the BDCs are also adding to the naira recovery. The CBN has also monitored the disbursement of the dollars allocated to banks and BDCs to ensure compliance with the set guidelines,” he said.
Group Head, Global Markets at Access Bank Plc, Dapo Olagunju, said the new window allows investors to sell dollars at any rate they chose and is expected to help bring investors’ confidence into the market.
He said: “Investors /Exporters FX Window help participants execute deals as based on their own market agreement. Today, both the dollar demand and supply sides are beginning to talk to each other and there is likely to be rate convergence soon,” he said.
He added that previously, the CBN had over $4 billion forex backlog, and found it difficult to settle ticket remittances of airlines. “Today, we are seeing customers buying Business Travel Allowances and Personal Travel Allowances with ease. It has been a difficult time for banks. We also see a regulator that is ready to sanction any bank that violates its set rules,” he said during the forex seminar organized by Access Bank in Lagos.
The CBN has assured of its continued intervention in the inter-bank market.
The apex bank was determined to ensure that the gains made by it in recent times, with regards to the stability of the exchange rate, are not eroded even as the regulator maintained that the CBN would continue to make necessary interventions to ensure the stability of the naira.
It said the forex windows for Small and Medium Enterprises (SMEs) as well as for investors and exporters were yielding the desired results by providing access to forex and easing pressure on the market.
The Acting Director of Corporate Communications at the CBN, Isaac Okorafor reiterated the bank’s commitment to ensure that there is enough supply of forex to genuine customers to achieve the goal of forex rates convergence.
The CBN since February has been involved in massive interventions in all segments of the interbank market to ensure liquidity and availability of forex.