Dollar Rate Rises, As Senate Orders CBN To Release $717.47 million

Investors and exporters were offered the Dollar at the rate of N465.13 kobo/$1 on Wednesday, according to FMDQ Exchange data.

This was the closing rate of the Naira to Dollar exchange in the official market. It contrasts the N464.67/$1 both currencies traded at the close of Wednesday’s session. 

Note that at some period during trading on Wednesday, the Naira to Dollar rate was as high as N466.89/$1. The Nigerian and United States currency also traded as low as N460/$1, but eventually ended trading at N465.13 kobo/$1. 

At the end of trading activities in the official market, investors and exporters exchanged $267.04 million in foreign exchange. 

The traders had transacted $127.72 million in foreign exchange on Tuesday, indicating the value of forex transactions increased by 109.08 per cent or $139.32 million. 

Meanwhile, while other companies or sectors are struggling to obtain foreign exchange, the Senate has asked the Central Bank of Nigeria (CBN) to release $717.47 million to foreign airlines.

The amount is the value of trapped funds belonging to international airlines, which they are unable to repatriate to their home countries. 

Also, the CBN was directed to increase the foreign exchange allocation to the international airline by $25 million, “Senate resolves to: (i) Reverse the current trend of increasing blocked funds in Nigeria and urge the CBN Governor to increase the current allocation to airlines at the retail auction by $25m fortnightly; 

“ii. Urge Mr. President to direct the CBN Governor to pay up the blocked funds to the affected airlines; and 

“iii. Appeal to the Airlines not to withdraw their services while efforts are on-going to resolve the issue,” the lawmakers said on Wednesday.

While this will solve the foreign exchange scarcity issue faced by international airlines, it will reduce the country’s foreign reserve by 2.03 per cent. As of 16 May, the foreign reserve was $35.19 billion.