Confusion over Exchange Rates Widen as Banks Sell Dollar at N505
Naira has been enmeshed in trading mires, and large numbers of Nigerians appear to be confused already about the true value of the local currency. Like electricity, the exchange rate fluctuates across various foreign exchange markets.
With the Central Bank of Nigeria’s (CBN) multiple foreign exchange rates, there is confusion over the true value of the local currencies rates via formal channels. The fact that it is not clear how much the apex bank wants Nigerians to pay for the local currency to meet basic online purchases has raised demand in the black market.
In the parallel market, spot rates are solely determined by moods, time and size of demand. Bureau de Change operating in the country, even without the apex bank’s legal backup, sell foreign currencies to buyers with an alpha profit motive.
Local banks charge customers for foreign currencies related transactions at different rates, according to channel transactions checks conducted at the weekend by MarketForces Africa, though CBN has maintained a stance that the naira will not be devalued.
Recently, no commodity prices stay permanent for more than a week, it is understandable the nation is a product of the law of gravity, but surging prices don’t come down in Nigeria as inflation bites persist.
Deep pockets Nigerians that have a higher propensity for using dollars among other foreign currencies often get it cheaper than the street. The defence has always been that demand for foreign currencies between producers and consumers come at a different rate.
At the weekend, Naira traded at N416.70 at the Investors and Exporters foreign exchange window and N588 per dollar at the parallel market. READ: Analysts Challenge CBN to Address FX Rates Confusion
Making an online payment above $20 with your debit card from Mastercard, the transactions were automatically rejected. However, Visa cards were used for the same transactions that Mastercard rejected.
Some FX traders are expecting another round of devaluation of the local currency in 2022, and investment banking experts told MarketForces Africa that CBN is only delaying the inevitable.
With all unorthodox policies, CBN has failed to keep the naira valuable but the apex bank has refused to backtrack the journey into an unknown destination – a subtle currency war, no country has ever won.
At the weekend, a Mastercard debit card issued by Guaranty Trust Bank used to deposit $20 for an online payment was conducted at N490.
At the same time, the Access Bank visa debit card used to pay for online assets was charged N505 per dollar. Recently, deposit money banks told customers about the reduction in the foreign currency available for online spending have been reduced by 80%.
However, some banks told our correspondence that you can get a dollar debit card with a maintenance charge as low as $20 in addition to value-added tax. #Confusion over Exchange Rates Widen as Banks Sell Dollar at N505
