By BABAJIDE KOMOLAFE
Reflecting the impact of the limit on sale of autonomous foreign exchange to bureaus de change (BDCs), the naira for the first time this year, appreciated by 202 kobo this week at the official foreign exchange market as following 50 per cent fall in demand.
But at the parallel market, the naira depreciated further to N160.5 per dollar.
At the Wholesale Dutch Auction System (WDAS) conducted by the Central Bank of Nigeria (CBN) yesterday, the naira appreciated by 85 kobo as the official exchange rate dropped to N151.79 per dollar from N152.64 on Monday. The appreciation was prompted by 41 per cent fall in demand for foreign exchange to $183 million from $314 million on Monday. The CBN offered $200 million and hence met all the demand.
On Monday the naira gained 102 kobo as the official exchange rate dropped to N152.79 per dollar from N153.81 per dollar last week.
Hence the naira has gained 202 kobo at the official market this week while total demand for the week dropped by 50 per cent to $497 million from $955 million last week.
Market operators attribute the sharp drop in demand and appreciation of the naira to the limit of $250,000 per week imposed by the CBN on banks’ sale of autonomous foreign exchange to BDCs.
A senior foreign exchange dealer who spoke on condition of anonymity said that what has happened is that the limit has freed huge amount of autonomous foreign exchange which banks now have to deploy to satisfying demand from end users.
He said most of the demand for demand for foreign exchange in the interbank market fueled by demand from BDCs hence the limit has occasioned sharp fall in demand for foreign exchange in the interbank market. Since Monday when the limit became effective, banks have suspended sale of autonmous foreign exchange to BDCs, a situation that have prompted the depreciation of the naira in the parallel market.
Investigations showed that the naira depreciated by another 150 kobo yesterday as the parallel market rate rose further to N160.5 from N159.5 on Monday.
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