By Francis Ogwo
The naira remained stable against the dollar as it closed at N465/$1 at the parallel market on Tuesday.
This is due to supply to Bureau De Change operators getting another round of dollar supply from the Central Bank of Nigeria.
Within one week in September, the local currency had strengthened by about 7.8% at the black market, with the CBN introducing some measures targeted at exporters and importers.
This was due to an effort to boost the supply of dollars in the foreign exchange market, and reduce the high demand for forex by traders.
Reports say the CBN has sold over $500 million to BDCs since they resumed forex sales on Monday.
This was expected to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.
However, the exchange rate against the dollar has remained volatile after the initial gains made, following the CBN’s resumption of sales of dollars to the BDCs.
According to the President of the Association of Bureau De Change Operators, Aminu Gwadebe, he expects the impact of the extra liquidity in the market to be gradual.
Despite the drop in speculative buying of foreign exchange, the huge demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.
