Naira rebounds on new Forex rules

The naira recovered to trade broadly flat after dipping 2.5 per cent in thin trade yesterday as dealers remained reluctant to quote prices owing to central bank moves to crack down on the speculation it blames for weakening the currency.

According to Reuters, the naira had recovered to trade at N182 to the dollar by mid-day, adding that dealers said most of them were not trading because of central bank restrictions introduced last week.

These include banning banks from holding their own funds in dollars and placing a 48 hours limit on how long dollars can be held after being changed from naira.

The CBN in a continued attempt to maintain the stability of the exchange rate, last week reviewed downwards the daily foreign exchange trading position of individual authorised dealers to zero percent of shareholders’ funds (unimpaired by losses) from one per cent.  The CBN however noted that this was a temporary measure.

Subsequently, another circular was released during the week that funds purchased from banks by their respective customers at the autonomous/interbank foreign exchange market must be utilised within 48hours from the date of purchase or be returned to the CBN for re- purchase at the bank’s buying rate.

[ThisDay]

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