Stories by Amaka Ifeakandu
Lagos
Financial operators have said that constant intervention in the Bureaux De Change (BDCs) segment of foreign exchange market by the Central Bank of Nigeria (CBN) will help to strengthen the naira.
They explained that selling of dollar to BDCs twice a week would not only reduce forex speculation, but it would increase availability of dollar in the market.
Commenting on the CBN intervention last week in BDC forex market, the Managing Director H. J . Trust and Investment, Mr Harrison Owoh said that once there is constant flow of the dollar in the foreign exchange market the local currency would continue to appreciate. He said that for BDC operators to depend solely on forex supply through autonomous market would create more room for people to continue to speculate . To make the naira appreciate further, he said CBN should review some part of foreign exchange market policy by allowing banks to sell autonomous forex to authorised BDCs and other forex end users.
However, the intervention of CBN at BDCs last week contributed to the appreciation of the Naira. The nation’s currency which traded at the rate of N210 on Wednesday last week appreciated by N.,, to the dollar at the close of business on Friday. the Central Bank of Nigeria (CBN) on Friday intervene in the BDC segment of the foreign exchange market by selling additional $30,000 to each of them on Friday.
The decision of the apex bank to intervene in the BDC segment was announced in a circular signed by Mr. Olalekan Gbadamosi, Director, Trade and Exchange Department, CBN. The circular titled, “Special Intervention in the Bureaux De Change (BDC) segment of the foreign exchange market”, stated, “This is to inform all licensed operators that in order to improve the liquidity in the BDC segment of the foreign exchange market, the Central Bank of Nigeria will be intervening in the market by selling $30,000 to interested BDCs on Friday 06, February 2015. This is in addition to the weekly sales to operators. Interested BDC operators are therefore advised to fund their accounts on or before Wednesday 04, February 2015 to accommodate the proposed intervention”.
