Dollar drops against Naira on rising optimism

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The dollar at the weekend, dropped at the parallel market on the strength of rising market optimism and ease of panic over the stoppage of foreign exchange sale to the bureau de change (BDC) operators.

In the Lagos parallel market, It traded between N505/$ and N515/$ at the weekend.

Earlier on Wednesday, the naira fell to N525/$, a day after the announcement of the new policy by the Central Bank of Nigeria (CBN), raising the fear that it would hit N550/$ in the next few weeks.

However, a meeting by the Body of Bank Chief Executive Officers (CEOs), projected that the exchange rate would recover to at least N423/$.

Also at the weekend, Deposit Money Banks (DMBs) commenced aggressive marketing of the personal travel allowances (PTA) and business travel allowance (BTA) through personalised messages and other platforms.

Banks were directed by the CBN to create mobile applications and alert systems to update customers of their foreign exchange movement, following the suspension of forex funding to BDCs.

“Further to the Monetary Policy Committees (MPC briefing of July 27, 2021, of Deposit Money Banks (DMBs are hereby reminded to set up teller points at designated branches across the country to fulfill legitimate FX requests for Personal Travel Allowance (PTA Business Travel Allowance (BTA), tuition fees, Medical payments, SMEs transactions, amongst others.

“In this regard, DMBs are also required to adequately publicise the locations of the designated branches and make necessary arrangements to sell FX to customers in cash and or electronically in compliance with extant regulations,” the Bank said via a circular issued on Wednesday.

The strategies of the Central Bank following the suspension of BDCs funding, may have raised market optimism, leading to a decline in panic buying.

A report by The Guardian, say dollar requests had dropped significantly, starting from late hours of Friday according to some traders.


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Author: abokimallamfx