Nigerian currency – the naira- exchanged between N1,300 and N1,350/$ on Thursday as against over N1400/$ it exchanges the previous day.
The rebound of the naira may not be unconnected with the 24 hours deadline given by the Central Bank of Nigeria to commercial banks to sell all excess foreign exchange holdings.
The Deposit Money Banks on Thursday made frantic efforts to offload their surplus dollar stocks.
It was learnt that the treasury departments of the DMBs spent the entire day battling to sell their excess FX holdings.
Officials processed several foreign exchange request forms of their customers as they sold more dollars to them.
According to officials, the central bank believes some commercial banks hold long-term foreign exchange positions to enable them to profit from the volatile movements of exchange rates.
The new development came on the heels of the adjustment of the methodology used for the calculation of the nation’s official exchange rate by the FMDQ Exchange, a situation that has moved the official exchange to about N1,500 from around N900/dollar.
Following the latest CBN directive which is aimed at unifying the official and parallel market rates of the local unit, several banks sold forex to their customers on Thursday.
The development led to a sharp rebound of the national currency in the official market. Bureau De Change operators in Lagos, Kano, and Abuja also pushed to sell their dollar holding amid fear the local unit might sustain the gain in coming days.
In Abuja, for instance, the naira traded at the parallel market between N1,300/$ and N1,350/$.
Author
