The naira is expected to firm up this week following the plan of dollar sales on Tuesday to the Bureau De Change (BDC) operators to the tune of $62.7 million by the Central Bank of Nigeria (CBN).
About 3,135 BDCs funded their accounts for $20,000 each last week Thursday, expecting to get allocation on Tuesday.
Aminu Gwadabe, president, Association of Bureau De Change Operators of Nigeria (ABCON), who disclosed this to BusinessDay on phone, also confirmed that the CBN planned to raise their weekly allocation from $10,000 to $20,000 to boost liquidity in the foreign exchange market.
Early last week, the apex bank had disbursed $20,000 each to the BDC operators in two tranches of $10,000 each, which according to Isaac Okorafor, CBN spokesman, underscores the commitment of the bank to ensure liquidity in the foreign exchange market.
The local currency was quoted at 410 to the dollar on the black market, compared with 398 to the dollar last week. At the official window it closed at 306.10 to the dollar on Wednesday, against 306.20 per dollar last week.
The CBN on Tuesday opened and sold a total of $100 million to Small and Medium Enterprises (SMEs) involved in the importation of critical and eligible finished and semi-finished goods.
The new window for SMEs provides small-scale importers an avenue to source forex to boost their respective businesses through the importation of eligible finished and semi-finished items.
Also, the apex bank plans to open a special window for investors to trade freely for certain eligible transactions, particularly dividends and investment remittances.
“We believe these policy measures, though unconventional, will have a boosting effect on real sector activities and improve ease of doing business in the country as they, to a large extent, remove biases of commercial lenders which limit access to credit supply,” analysts at Cowry Asset Management Limited said.
The weekly movements in most dated forward contracts at the interbank OTC segment suggested future stability of the naira viz-a-viz the US greenback amid a slight increase in the foreign exchange reserves – external reserves increased week-on-week by 0.22 percent to $30.39 billion as at Wednesday, April 12, 2017. The 1-month, 3 months, 6 months and 12 months forward contracts remained stable w-o-w at N315.34/$, N323.27/$, N331.53/$ and N349/$, respectively. The spot rate however appreciated by 0.05 percent to N306.20/$ amid the $7.5 million in intervention sales by CBN to banks.