Nigeria’s central bank offered to sell dollars to Bureaux de Change operators in the West African nation at a rate of 1,101 naira, according to a statement on its website, amid ongoing measures to stabilize the local currency.
The rate is the highest level that the central bank has sold the greenback to BDCs since February when it first offered them at 1,301 naira per dollar. It’s also 12% above the 1,251 naira/dollar where the currency closed on the official market on Friday, which is the most recent indication available.
That level was already the highest the currency has traded since Jan. 26, on the eve of a second round of devaluation that has slashed around 63% from the naira’s value against the dollar since President Bola Tinubu eased foreign exchange controls in June.
The moves, designed to attract foreign capital and boost economic growth, had mixed results initially but have seen the naira regain ground in recent weeks.
It has bounced more than 20% from a low of 1,627/dollar on March 8 in response to aggressive monetary policy tightening, with the central bank raising interest rates by 600 basis points to 24.75% since the start of the year.
Local dollar liquidity has also been boosted after the central bank cleared a backlog of overdue dollar purchase agreements estimated at $7 billion.
The offer to the BDCs may indicate mild intervention by the central bank to guide the naira to stronger levels against the dollar, or that it expects the currency to continue its rally, which has made it one of the best performing currencies tracked by Bloomberg in the past month.
Bureaux de Change in Nigeria are allowed to sell foreign currency to customers at a spread of not more than 1.5% above the purchase price.
Source: bloomberg.com
