Naira trades 1,498/$ at official market, CBN tackles racketeers

By Joy Baba-Yesufu

The naira appreciated slightly against the United States dollars at the Nigerian Autonomous Foreign Exchange Market on Thursday, closing at the rate of N1,498.25/$ from N1,503.38/$ recorded the previous day.
This came as the Central Bank of Nigeria rolled out series of circulars to tackle foreign exchange racketeers and financial services operators engaged in sharp practices. The three circulars were dated February 14, 2024.
The CBN, in the first circular, stopped banks from paying Personal Travel Allowance to their customers in cash. In a second circular, it also asked International Oil Companies from repatriating all their revenue to their parent companies at once. The apex banks also, in the third circular, reviewed its guidelines to stop under-invoicing of exports and over-invoicing of imports.
They circulars came as the naira closed near 1,500/dollar at the official market on Thursday. This was despite a drop in dollar supply by commercial banks at the spot FX market.
According to data from the FMDQ exchange securities, the supply had increased by $292.3m to $381.92 on Tuesday from $89.61m recorded on Monday. It however dropped to $117.87m on Wednesday.
On Monday, the naira started at an all-time low of N1,534/$, indicating serious consequences on the price of goods and services.
The naira gained marginally on Tuesday to N1,499/$ but fell to N1,503.38/$ at the close of trading on Wednesday before recovering to N1,498/$ at the close of trading activities on Thursday.
On the parallel segment of the foreign exchange market, the Naira depreciated to N1,600/$ Thursday’s rate is about N97 or 6.45 per cent higher than the N1,503/$ at the beginning of the week.
Checks show that Nigerians have continued to visit the black market sellers despite the efforts of the Central Bank of Nigeria to curb speculations.
In recent times, the naira has weakened beyond financial experts’ projections. The Group Managing Director of Cowry Asset Management Limited, Johnson Chukwu, during his firm’s 2024 outlook event projected that the naira might depreciate to N1,500/$ in 2024.
He said, “The worst case scenario is that the naira could worsen to N1,500 against the dollar.”
Some Bureau De Change operator in Abuja said hat the American greenback closed at N1,600/$ on Thursday.
“Today, the dollar was sold at the rate of N1,600. It is increasing and we are not happy about it.”
BDC operators in the CMS area of Lagos also confirmed that the naira closed at N1,610 to a dollar.