Naira Recovers To N1,450 To Dollar

Yesterday, the naira experienced a significant surge against the dollar, closing at N1,450 in the parallel market.

The rate represents N70 gain from N1,520 to dollar it closed on Wednesday.

Although the local currency was trading at N1,400 to dollar in the morning hours, but it relapsed to N1,450 at the close of business.

The closing rate was still stronger than Wednesday’s tipping rate, data collated from different street traders revealed.

Hassan Abdul, a BDC trader in Central Lagos, said the naira was trading at N1,400 to dollar around 12 noon, but was surprised as buying rates later surged, as many dealers moved to cut losses.

“I think the problem was that many currency dealers who bought on Wednesday when the rate was very high, were not ready to absorb high level of losses.  It is difficult to know what the future holds for the naira, unless there is improved liquidity in the market,” he said.

Checks at the Aboki Forex website, confirmed Abdul’s position. The website kept the dollar buying rate at N1,450 to dollar and N1,500 to dollar for selling rate.

Meanwhile, bank customers resident in the Federal Capital Territory (FCT) have decried the continuous fall of the naira to the dollar.

According to them, their purchasing power has reduced drastically.

The News Agency of Nigeria (NAN) reports that one dollar to Naira exchange rate at the parallel market is between N1,440 and N1,500 while the official rate is N1,356.

Some of the customers who spoke in Abuja yesterday, appealed to the Federal Government and the Central Bank of Nigeria (CBN) to urgently evolve measures to address the situation.

They also lamented that the situation had inflicted untold hardship and had reduced their standard of living, saying the development had also negatively affected all sectors of the economy.

A bank customer with Access Bank, Mrs Irene Igunmado, said the fall of the naira had reduced the purchasing power as the prices of goods and services had skyrocketed.

Igunmado also said the increase in the prices of food items had made her family to reduce their standard of living.

”Nobody tells anyone in Nigeria about the situation now. Even my little children understand that times are hard.

”This naira fall is worsening the situation because when you go to the market and ask traders why the prices of everything have increased, they will tell you it’s because of the dollar.

”Companies are closing down, relocating to other places. This is not the ‘renewed hope’ that the present government promised us,” she said.

Mrs Victoria Emeka, a bank customer with Guaranty Trust Bank, said although the food monthly allowances for her family had increased, it could not cater for their needs.

”Every month, my husband usually give me N30,000 to buy food items that will last us for the month because I have a permanent list that I use.

”Now, although he has increased the amount to N60k but the money will still not buy half of the things in the list which was usually purchased entirely with N30k. The government needs to do something urgently,” she said.

Mr Franklin Ogunleye, a bank customer with First Bank Plc, said the naira fall was the reason for the relocation of many Nigerians to other countries.

Ogunleye said he was feeling the heat of the naira fall as he was sending money to his family abroad, who just relocated recently and were yet to fully stabilise and get a job.

”This Naira fall is biting me so hard because my business is about to collapse.

”I relocated my family to the United Kingdom (UK) in 2023 and every month, I change money and send to them.

”Sometimes, I change as much as two million naira but it will still not be enough for them because of the exchange rate.

”I am thinking seriously of leaving this country to join them so that I can reduce this untold hardship,” he said.

A banker who preferred anonymity told NAN that banks would always strive to reduce the hardship faced by customers due to the scarcity and fall of the Naira.
The CBN on Jan. 31, ordered Deposit Money Banks to sell their excess dollar stock latest February 1.

The CBN also warned lenders against hoarding excess foreign currencies for profit.

It would be recalled that Bureau De Change (BDC) operators in Abuja had shut down operations due to scarcity of the dollar.

The CBN removed the cap on the allowable limit of -2.5 percent to +2.5 percent around the previous day’s closing rate for the International Money Transfer Operators (IMTOs). This adjustment signifies a shift in the regulatory framework, providing IMTOs with more flexibility in determining exchange rates.

This comes after the banking and financial institutions regulator on Wednesday announced limits on how much banks can hold in foreign currencies and expressed concern about the growth of forex exposures on their balance sheets after the local currency tumbled against the U.S. dollar.

Naira is the cheapest and best value of any in Africa, or any of the emerging or frontier markets – according to FIM Partners currency model.

In a new circular (TED/FEM/FPC/GEN/001/003) dated January 31, 2024, the CBN announced a significant change in the regulations governing exchange rate quotes by International Money Transfer Operators.

Previously, IMTOs were required to quote rates within an allowable limit of -2.5 percent to +2.5 percent around the previous day’s closing rate of the Nigerian foreign exchange market, according to the circular TED/FEM/PUB/FPC/001/009 dated September 13, last year.

All Authorized dealers, International Money Transfer Operators, and the general public are advised to take note of this development and ensure compliance with the revised regulations. The CBN’s decision reflects ongoing efforts to adapt and enhance the dynamics of the Nigerian foreign exchange market, the circular stated.

“The reason for the removal of the cap is to incentivize the IMTOs to transparently transfer their receipt into the country,” Aminu Gwadabe, president, Association of Bureau De Change Operators of Nigeria (ABCON), disclosed.