The naira strengthened to N468 to the dollar on the parallel market yesterday, gaining N7 as global forex dealer, Travelex, stepped up its sales of dollars to Bureaux De Change (BDCs), New Telegraph learnt.
The local currency, which had been on a free fall in recent weeks, losing about 15 per cent of its value to drop to a record low of N490/dollar at some point, started showing signs of recovering when it gained N15 to close at N475/dollar ;ast Friday evening, the same rate it closed at on Monday and Tuesday.
It, however, closed negative at N310.24 on the FMDQ OTC platform. Attributing the naira’s recovery on the parallel market to Travelex’s increased sales of dollars to BDCs, an operator in Lagos, Mr. John Akinluyi, said: “More BDCs are now buying dollars from Travelex and this has improved forex supply in the market. This is the reason for the naira’s appreciation in the last two days.”
He said that although Travelex was currently selling only $10,000 to BDCs per week instead of the $50,000 stipulated by the Central Bank of Nigeria (CBN), the situation was much better in terms of forex availability in the market compared to the acute dollar scarcity challenge that operators faced when they had to access forex from the banks.
Forex dealers told this newspaper that the naira’s current appreciation on the parallel market was not sustainable, as the liquidity challenge in the official interbank market was yet to be resolved. It will be recalled that in a move aimed at reducing the huge gap between the official and parallel market rates of the naira, the CBN had in circular dated July 22, 2016 directed agent banks to approved International Money Transfer Organisations (IMTOs) to sell foreign currency accruing from inward money remittances to licensed BDCs.