CBN resumes dollar sales for SMEs, school fees as naira falls to 450/$ at parallel market

With gradual easing of the COVID-19 lockdown in Nigeria and elsewhere, Central Bank of Nigeria (CBN) says it has resumed provision of foreign exchange to all commercial banks for onward sales to parents wishing to pay schools fees and SMEs wishing to make essential imports needed to revamp economic activities across the country.

This is as $1 has been exchanging for N450 in the parallel market since last Friday.

In particular, the CBN is resuming the provision of over $100 million per week for both categories.

CBN has also made arrangements to resume foreign exchange sales to the BDC segment of the market for business travels, personal travels and other designated retail uses as soon as international flights resume.

The apex bank reiterated in a statement signed by Isaac Okorafor that it was adequately meeting the needs of all legitimate users. It also stated its capacity to continue to do so.

“There is therefore no need for panic by any end-user that could necessitate recourse to illegitimate sources and spike in foreign exchange rates.

“Given this, the bank has ramped up its surveillance of the foreign exchange markets for speculators, smugglers and other illegal users, and will take decisive actions against anyone/institutions involved in such nefarious activities,” the bank said.

CBN devalued the naira official rate from N306 to N360 per dollar and moved the rate at which investors and exporters could purchase the dollar to N380 from N366 on March 21.

Bloomberg also reported that twelve-month naira forwards traded at N509.90 a per dollar on Tuesday morning, suggesting investors see the currency falling to around that level in a year.

The investors’ and exporters’ trading window, which was introduced in 2017 to attract capital inflows by offering investors a weaker and market-determined naira rate, has experienced a shortage of dollars since the central stopped its periodic interventions to sell foreign exchange in March.

CBN stopped foreign exchange sales to bureau de change (BDC) on March 25, citing a request by Association of BDC Operators who asked for a market holiday pending re-opening of borders and control of COVID-19 pandemic.

 

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