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We won’t devalue Naira – CBN tells BDCs

By on January 14, 2017

The Central Bank of Nigeria (CBN) has told Bureau de Change (BDC) operators it does not intend to devalue the naira and will support it at current levels, especially with a recent rise in oil prices, the head of their association said on Thursday.

Reuters quoted the President of the Association of Bureau De Change of Nigeria (ABCON), Aminu Gwadabe, to have said the CBN Governor, Godwin Emefiele told the group in a meeting it was looking at ways to boost dollar liquidity on the official market to eliminate the spread to the parallel market.

The government has been pressing retail operators to narrow what it says is a damaging gulf between the naira’s official rate – currently N305 to the dollar – and the parallel rate.

On Tuesday the operators set their first ever reference exchange rate for the naira at 399 per dollar ahead of the central bank meeting.

“With the recovery of oil prices, CBN (Central Bank of Nigeria) has no intention of devaluing the currency and intends to support the naira at the present level,” Gwadabe said, quoting the central bank governor.

Central bank data showed foreign exchange reserves rose 6.68 percent to $26.65 billion at Jan. 10 from a month before, the highest level since May, driven by a rise in crude prices.

The bank appealed to operators to follow the rules in order to avoid sanctions and curb speculation on the currency.
Meanwhile, the naira dropped to N495 to the dollar on the parallel market yesterday, weaker than the N492 to the dollar it closed the previous day. The development was attributed to weaker forex supply in the market, as demand continued to rise.

 

[ThisDay]