NAIRA DEPRECIATES FURTHER AS DOLLAR SALES TO BDCS WOBBLE
Read Time:2 Minute, 14 Second
•Speculation, hoarding reemerges
•Push Naira to N1,450/$ in parallel market
The naira’s downturn continued yesterday as speculation and hoarding reappeared, leading to additional devaluation in the official and parallel markets. Some Bureaux De Change, BDCs, also decided to withdraw from the Central Bank of Nigeria’s (CBN) dollar sales program.
HOTJIST has also learned that the Naira further depreciated yesterday, from N1,415 per dollar on Tuesday to N1,435 per dollar in the parallel market. This was in addition to the Naira depreciating to N1,421.06 per dollar in the Nigerian Foreign Exchange Market, NAFEM, despite the ongoing nationwide raids and arrests of street currency vendors.
The indicative exchange rate for NAFEM dropped to N1,421.06 per dollar from N1,416.57 per dollar on Tuesday, according to data from FMDQ, suggesting an N4.49 devaluation of the naira.
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Consequently, the margin between the parallel market and NAFEM rates widened to N13.94 per dollar from N1.57 per dollar on Tuesday.
Dollar sales to BDCs
In a bid to intervene in the retail segment of the forex market, the CBN in February resumed dollar sales to BDCs. Since then, the apex bank has held three editions of the dollar. At the last edition, the CBN offered to sell $10,000 per BDCs, directing them to sell at a maximum margin of 1.5 percent.
BDC operators, however, complained dollar disbursement from CBN is too slow that and takes three to four weeks between when they make payment and when the dollars are disbursed to them.
HOTJIST reliably gathered that, as a result of this delay and the uncertainty in the forex market, some BDCs have asked the CBN to refund their Naira payments.
Top BDC operators who confirmed this development to HOTJIST under the condition of anonymity said that some of the BDCs that asked for refunds have gotten their money.
Speaking to journalists on condition of anonymity, the Chief Executive of a BDC said, “I think the CBN is overwhelmed. You pay money and it takes one month for you to collect $10,000. It is over a month now since they intervened and they have not intervened again.
“Even the last one that they did some BDCs are just collecting the dollars. Some are even saying they should return their money. They are asking for a refund because there are many challenges. Some have paid but their name is appearing in another location which makes it impossible to collect the dollars. Some are getting their refund but it is a very slow pace too.”
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