After a sustained period of free fall of the naira in parallel market against the dollar, the naira appreciated considerably by the end of the week. Barely three days after the Central Bank of Nigeria, CBN, adjusted its foreign exchange policy, the naira rose from N505 against the dollar on Wednesday to N495 on Thursday.
The CBN had adjusted its forex policy aimed to boost the supply of forex thereby empowering banks to meet the needs of their customers. The CBN begins the weekly sale of $1 million to each of the country’s 21 commercial banks next week at N375 to the dollar to clear a backlog of demand for retail users and to try to reduce the gap between the official and black market rates.
The naira had crashed to 520 to the dollar in the parallel market on Monday as scarcity of the dollar continued to weigh on the exchange rates. The CBN released $370.8 million to 23 banks last Tuesday.
Isaac Okoroafor, acting director, Corporate Communications, CBN, explained that the move was sequel to the apex bank’s promise to ease the difficulties being encountered by Nigerians in obtaining funds for foreign exchange transactions. He said that while seven banks received full allotments of their respective bids ranging from $315 to $360 valued at $37.5 million each, others received allotments ranging from $46,512.50 to $15,578,081.51.
Okorafor said the CBN’s intermediation in the forex market was the first wholesale intervention aimed at easing the pressure of access to forex on Nigerians who intended to meet obligations that fell under visible and invisible needs categories.