The sustained intervention by the Central Bank of Nigeria on the interbank market since February has continued to crash the dollar.
Recall in February the Central Bank of Nigeria pumped n early $5 billion onto the interbank bank market and this appears to be yielding results as the dollar yesterday crashed to N368/$ on the parallel market after over three weeks at N382/$, representing N14 appreciation within the period.
The exchange rate was confirmed by Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON). He said the effectiveness of the CBN’s dollar injections in the interbank and the stability in the market require that the regulator reviews the rate band for bureaux de change (BDCs) downwards from N360/$ to $340/$.
Gwadabe said the naira has remained stable across the board in the near term on increased dollar supply to both the official interbank window and the black market. It has been trading around N382/$ on the parallel market in the last two weeks, while at the interbank market the naira was trading at around N305.40/$.
He said there is rapid elimination of speculation in the forex market. “The creation of SMEs and exporter/investors windows are helping to stabilize the naira. Also, the $40,000 weekly dollar interventions to the BDCs are also adding to the naira recovery. The CBN has also monitored the disbursement of the dollars allocated to banks and BDCs to ensure compliance with the set guidelines,” he said.
He said there is rapid elimination of speculation in the forex market. “The creation of SMEs and exporter/investors windows are helping to stabilize the naira. Also, the $40,000 weekly dollar interventions to the BDCs are also adding to the naira recovery. The CBN has also monitored the disbursement of the dollars allocated to banks and BDCs to ensure compliance with the set guidelines,” he said.
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