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NairaWatch: Exchange rate remains stable at forex markets after CBN sold $200 million to BDCs

BY David Oladele

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CBN Governor, Godwin Emefiele
CBN Governor, Godwin Emefiele

Nigeria’s exchange rate at the NAFEX window on Friday, September 25, maintained its stand as it closed at N386/$1 during intraday trading.

Also, Techeconomy.ng reported that naira remained stable for the second consecutive day, closing at N467/$1 at the parallel market on Friday, September 25.

This reliable medium reported that the Naira remained stable against the dollar to close at N467/$1 on Friday at the black market where forex is traded unofficially.

And that was the same rate that it was exchanged for on Thursday, September 24.

Suffice to say that Nigeria’s Naira has strengthened by about 7.8% within the last one week at the black market as Central Bank of Nigeria (CBN) introduced some measures targeted at exporters and importers, in order to try to boost the supply of dollars in the foreign exchange market, and reduce the high demand for forex by traders.

Recall that the CBN sold $200 million to BDCs since the resumed forex sales on Monday, September 7, 2020.

The apex bank made the sales to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.

Meanwhile, the unfortunate thing is that the exchange rate against the dollar has failed to sustain the initial gains made, after the CBN announced plans to provide liquidity.

Reacting to the way the local currency is fluctuating, BDC operators have urged the apex bank to reconsider the margin allowed for the currency traders, as it was inadequate to meet their expenses.

It was learnt that there has been a drop in speculative buying of foreign exchange.

Although the demand backlog by manufacturers and foreign investors still put pressure and create a volatile situation in the foreign exchange market.

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