Forex intervention crashes dollar to N380/$1

The naira over the weekend consolidated its continuous gain against the US dollar at the parallel market, as it exchanged below the Bureau de Change (BDCs) official rate of N399 to close at N380 per US dollar.

Business Times checks, however observed that currency hawkers across Lagos major markets and some part of Ogun State in their numbers flooded market junctions to converse for customers to buy dollars at cheaper rate, depending on the bargaining power of such customers.

When our correspondent visited some of the parks and junctions, it was observed that the local currency was exchanged as low as 380 to a dollar, while some were seen selling between 385 and 390.

This new rate of the naira was stronger than N400 sold on Thursday, while the pound sterling and Euro closed at N490 and N430.

At the BDC window, the naira was traded at N399 to the dollar, while the pound sterling and the Euro were sold at N500 and N400.

The Nigerian currency appreciated at the interbank market, closing at N307 to the dollar, from N308 posted on Thursday.

Traders at the market said liquidity boost at the interbank market by the CBN was fast forcing the rate down at the market.

But Alhaji Aminu Gwadabe, the President of the Association of Bureau De Change Operators of Nigeria (ABCON), had hinted that with continuous effort from the CBN in ensuring convergence forex rates, had put estimated loss of speculators and hoarders to over N700 million in the week under review.

Although, he also said CBN-licenced BDCs would incur regulatory losses of N130 million the same week, the CBN’s disparity in applicable exchange rates among players in the market.

According to him, the public has refused to buy foreign exchange from BDCs for invisibles such as medicals, school fees, personal and business travel allowances at a rate above N375 to the dollar.
The financial expert urged the CBN to promptly address the issue.
But the surplus supply of dollars has again jolted speculators and caused a further increase in value of the Naira.

The foreign exchange market closed on Friday without selling off all the foreign currency released by the apex bank.

Fresh 100 million dollars was released at the interbank market to meet customers’ demands, but the dealers were only able to pick about 81.35 million dollars, leaving surplus.

Mr Isaac Okorafor, the Acting Director, Corporate Communications, CBN, attributed the inability of authorised dealers to pick up the entire offer of the CBN to increasing dollar supply.

In a statement, he said another reason was the current sense of apprehension among dealers who anticipate a further crash in the rate of the dollar.

He reiterated the determination of the Bank to sustain its current interventions in the market.

“Those who doubt the capacity of the Bank to sustain the intervention in the FOREX market are beginning to have a change of mind,” he said.

The Naira has continued to sustain its ride against major currencies, especially the United States dollar, since CBN consistently pumped in more dollars.

The dollar exchanged at about N380 in Abuja, and N385 to N390 in Lagos.

To this end, forex dealers believe that the continued intervention by the CBN have triggered further apprehension among speculators, who anticipate further losses given the continued crash of the dollar.

It is worthy of notes that over the past five weeks, the CBN through its regular interventions at the foreign exchange market sold over $2 billion dollars to meet wholesale and invisible demand, causing the value of the naira to soar at the parallel market.

Presently, the value of the naira at the black market and the Bureau de Change (BDC) rate have converged and is nearing the rate at which banks sell to the