The Naira strengthened by N1 at the parallel market on Wednesday, August 10. The local currency which had remained unchanged for two days at the parallel market now trades at N394/$1, as against the former rate of N395/$1.
On Tuesday, the central bank took some steps which it hoped would help narrow the gulf between the official and black market rates and boost dollar liquidity.
It pegged the dollar transactions which banks can carry out with Bureau De Change (BDCs) at $30,000 per week and set a margin for the banks to sell dollar to currency outlets at not more than 1.5 percent over the rate at which they bought.
Also, the Naira spot rate at the interbank market closed at N317 as against N312.50 to the dollar which it exchanged for on Tuesday.
The British pounds at the interbank market exchanged for N402.9359, while the Naira was sold at N344.0651 to one Euro on Tuesday, while the British pounds at the parallel market exchanged for N505, while the Naira was sold for N426 to one Euro same day.
The Central Bank of Nigeria intervened on Tuesday with a total of $6.86 million on the interbank foreign exchange market to help support the naira after it hit N350 to the dollar in thin volume, traders said.
Henceforth, Bureau De Change (BDC) operators is allowed to nominate its preferred Authorized Dealer and can only buy the said amount from only that bank of its choice in a week.
Subject to maximum disbursement of $5,000 per transaction, funds purchased by Authorized Dealers (ADs) are be disbursed for Business Travel Allowance/Personal Travel Allowance; Overseas School fees and Overseas Medical fees.
According to the apex bank, forex cash purchased by BDCs from Authorized Dealers shall be sold to foreign exchange end users at a rate not exceeding two (2) per cent margin above the buying rate. The two per cent margin it said shall be applicable to all funds to be retailed by BDCs regardless of sources of fund.