Yesterday, the naira closed at N1,200 to the dollar in the parallel market, showing an improvement from the N1,218 to the dollar rate observed on Monday, indicating an appreciation of N18 to the dollar.
The local currency has of
recent commenced rapid recovering, as volatility in the market dropped after
the Central Bank of Nigeria (CBN) commenced dollar sales to bureau de change
operators.
The CBN recently directed that
authorised dealers to pay Personal and Business Travel, allowances (PTA/BTA) to
their customers through electronic channels only, including debit or credit
cards instead of cash.
“In line with the bank’s
commitment to ensure transparency and stability in the foreign exchange market
and avoid foreign exchange malpractices, All Authorised Dealer Banks shall
henceforth effect payout of PTA/BTA through electronic channels only, including
debit or credit cards. For the avoidance of doubt, payment of PTA/BTA by cash
is no longer permitted,” the apex bank said.
Importers are finding it
difficult to secure the funds from the official FX and black markets.
Legitimate needs driving the
demand include Form A applications for Business Travel Allowance (BTA),
Personal Travel Allowance (PTA), school fees, and medical fees. Small and
Medium Enterprises (SMEs) are also grappling with the scarcity, as highlighted
by the use of Form Q.
“The problem is that dollars
are scarce in the market. People are not bringing dollars and demand is so high
that is why the price is going up,” a street trader said yesterday.
Association of Bureaux de
Change Operators of Nigeria (ABCON) President, Dr. Aminu Gwadabe, said aside
monetary policy tightening that led to interest rate hike and more investment
in government instruments and clearance of $7 billion forex backlog forward
commitments, the recall of the BDCs has significantly boost dollar liquidity at
the retail end of the forex market.
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