Nigeria’s central bank took action on Thursday by selling the dollar at 1,450 Naira to retail exchange bureaus.
This measure was intended to stabilise the currency, addressing concerns that distortions in the retail market were impacting parallel markets and widening the exchange rate premium.
On Thursday, the Naira reached a new low of 1,640 per dollar, mirroring its value in the parallel market.
According to LSEG data, it had already hit a four-month low of 1,612.50 Naira in the official market on Wednesday.
In a circular, the Central Bank of Nigeria (CBN) stated, “We have observed the ongoing distortions in the retail end of the market, which are affecting the parallel market and further widening the exchange rate premium.”
To address this issue, the CBN has authorised the sale of foreign exchange to eligible Bureau de Change (BDC) operators to satisfy the demand for invisible transactions, such as personal travel allowances and medical expenses.
Each BDC is to receive $20,000 for this purpose.
This move aims to satisfy the demand for invisible transactions, including personal travel allowances, medical expenses, and school fees. Each BDC is allocated $20,000 to meet these demands.
The central bank hopes this measure will help stabilise the naira and reduce the disparity between the official and parallel market rates.
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