Naira Records Marginal Gain as Dollar Sales Rise by 174.38%

Nigeria’s naira recorded marginal gain against the US currency following a surge in dollar supply after the Central Bank of Nigeria (CBN) sold some amount to banks on Thursday.

During the foreign exchange (FX) market auction on Thursday, dollars supplied by willing buyers and willing sellers including the CBN rose significantly by 174.38 percent to $323.41 million compared to $117.87 million recorded on Wednesday at the official market.

BusinessDay reports that the CBN on Thursday sold a little over $100 million to the banks that did not get the greenback at its first dollar auction in five months on Tuesday.

After trading on Thursday naira appreciated by 0.34 percent as the dollar was quoted at N1,498.25 as against N1,503.38 quoted on Wednesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to the data obtained from the FMQD Securities Exchange.

The intraday high hit a record low of N1,607 per dollar on Thursday from N1,582/$1 quoted on the spot on Wednesday. Also, the intraday low depreciated to N1,100 per dollar on the same day, lower than N922.38 on Wednesday.

At the parallel market, popularly called black market, naira weakened to N1,625 per dollar, lower than N1,600/$1 on Thursday due to strong demand as dollar shortage persists across FX markets.

The CBN on Thursday stopped the payment of Basic Travel Allowance (BTA) and Personal Travel Allowance (PTA) in cash dollars, effective immediately.

This is in a bid to promote transparency and stability in the foreign exchange market while preventing malpractices.

Referencing memorandum 8 of the foreign exchange manual and circular FMD/DIR/CIR/GEN/08/003 dated February 20, 2017, the CBN’s trade and exchange department outlined the eligibility criteria for accessing PTA/BTA.

Effective immediately, all Authorized Dealer Banks are mandated to process pay-outs of PTA/BTA exclusively through electronic channels, which include debit or credit cards.

The traditional method of cash disbursement for these allowances is no longer permissible, the circular stated.

The directive, signed by Hassan Mahmud, director of the trade and exchange department, underscores the CBN’s commitment to enhancing accountability and efficiency within the foreign exchange market.

Authorized dealers and the public are urged to adhere to these guidelines accordingly.

For further details and compliance, all stakeholders are encouraged to consult the official communication from the Central Bank of Nigeria.

-BusinessDay

February 16, 2024