Naira Depreciates After CBN Stops Sale Of Forex To BDCs

Following Central Bank of Nigeria’s announcement that it has stopped sales of forex to Bureau De Change operators, Naira fell slightly against the U.S dollar at the parallel market on Tuesday.

The CBN accused the parallel market of becoming a conduit for illicit forex flows and graft, saying it would end the processing of applications for for BDC licences in the country.

Making the disclosure while announcing that the bank has retained its benchmark policy rate during a live TV broadcasting, the CBN governor, Godwin Emefiele, noted that weekly sales of foreign exchange by the CBN will henceforth go directly to commercial banks.

“We are concerned that BDCs have allowed themselves to be used for graft,” Mr Emefiele said.

According to data recorded on abokiFX.com, a website that gathers the parallel market rates in Lagos, naira closed at N505.00 per $1 on Tuesday, a N1.00 or 0.20 per cent depreciation from N504.00, the rate it traded in the previous session on Monday.

Similarly on the FMDQ Security Exchange where forex is officially traded, the Naira also fell against the Dollar at the official market segment on Tuesday.

In the data posted, the naira closed at N411.67 per $1 on Tuesday, representing a N0.17 or 0.04 per cent depreciation from N411.50, the rate it exchanged hands with the hard currency in the previous session on Monday.

This became obvious as forex turnover plummeted by 17.10 per cent, with $115.67 million posted at the end of the market session as against the $139.49 million recorded in the previous session on Monday.

The Naira hit an intraday low of N412.95 and oscillated to a high of N387.67 before closing at N411.67 on Tuesday.

As of the close of business on Tuesday, the spread between the official market and the parallel market segment rates is pegged at N93.33, translating to a margin of 18.50 per cent .