Naira Plunges as Banks Resume FX Sales to Customers
The naira plunged in the official foreign exchange (FX) market on Tuesday on the back of an increased demand for US dollars for payments. According to data from the FMDQ platform, the naira depreciated by 0.31% in the official window, closing at N1,552.78 per dollar.
Deposit money banks (DMBs) informed customers in a series of emails that foreign currency sales for personal and business use have been restored. At the beginning of the week, exchange rates worsened by N2.47 to close at N1,550.05 in the official market.
“We are excited to announce the resumption of foreign currency sales for your international payments,” First Bank said in an email. Similar notice was received from Ecobank Nigeria Limited, suggesting that the Central Bank of Nigeria (CBN) has let local lenders off the regulatory hook.
Hence, banks told customers foreign currency payments needed for personal and business travel allowance can be purchased at a rate determined by the CBN. Medical, foreign school fees and other qualified form A payment can also be handled across the counter, local lenders said in separate emails reviewed by MarketForces Africa.
According to channel check, the naira appreciated at the parallel market as banks FX sales reduced demand pressures at the informal currency market. On Tuesday, the naira appreciated by N5.00 to close at N1,665 in the parallel market. Consequently, the spread between the two markets narrowed.
Last week, Apex Bank sold FX to banks four times. The last FX sales on Friday totalling $28.7 million between the rates of N1,545.00/$1 and ₦1,555.00/$1 brought the total FX sales for the week to $329.6 million.
As a result, the nation’s gross external reserves nosedived. Information obtained from the CBN revealed that foreign reserves fell nine times this week as the market expects FX intervention to persist. At the last look, gross external reserves printed at $40.295 billion, down from $40.920 billion earlier in the year, suggesting a slowdown in FX inflows.
In the global commodity market, oil prices trended lower on Tuesday, with Brent Crude at $79.01 per barrel and West Texas Intermediate (WTI) at $75.68 per barrel. #Naira Plunges as Banks Resume FX Sales to Customers CBN Opens FX Window for BDC to Stock up at NFEM Rate
