Naira rebounds on parallel market after CBN dollar sale

The naira firmed against the dollar on the parallel market on Wednesday following central bank sales of about $80 million to bureau de change operators, traders said.

The local currency was trading at N215 to the dollar on the parallel market, compared with N228 at the previous day’s close, according to Reuters. It closed at N197 to the dollar on the interbank market, unchanged from the previous day.

“We are expecting about $80 million dollar sales from the central bank today, which could further boost liquidity in the market and ease pressure,” one operator said.

Aminu Gwadabe, president of the bureau de change operators, said the central bank had put on hold its directive asking them to request dollar buyers to provide their Bank Verification Number (BVN), a new biometric identification for commercial banks customers.

The central bank had last month asked bureau de change operators to request dollar buyers to provide their BVN in a bid to curb speculative bids.

“The BVN exercise is put on hold and there is a huge market calmness,” Gwadabe told Reuters. “The naira is gaining strength, we expect it to close below 215 to the dollar,” he added.

The naira had weakened on the parallel market to as much as 242 to the dollar last month, on persistent dollar demand after central bank limited importers’ access to dollars on the official interbank market to buy a wide range of goods, in order to save its reserves.

[ThisDay]

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