Naira falls again as CBN moves to stop forex sale to banks

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Naira fell massively at the black market on Thursday after traders learned that the Central Bank of Nigeria (CBN) was planning to halt dollar sales to commercial banks.

Although CBN said it will make the decision by the end of 2022, traders wasted no time to weaken the Naira from N572 to above N580 to a dollar.

According to a forex trader in Lagos, sourcing for foreign exchange has been difficult lately especially British Pounds sterling and it was normal they pass the cost to willing buyers.

On Thursday, the CBN Governor, Godwin Emefiele, after a bankers committee meeting in Abuja announced to journalists in a virtual conference that commercial banks must begin to source their forex from export proceeds.

He noted that the era of waiting for CBN to give dollars is no longer visible.

“The era is coming to an end when, because your customers need 100million dollars in foreign exchange or 200 million dollars, you now want to pack all the dollars and pass it to CBN to give you dollars.

“It is coming to an end before or by the end of this year. We will tell them don’t come to the Central Bank for foreign exchange again, go and generate your export proceeds.

“When those export proceeds come, we will fund them at 5% for you and they will earn a rebate. Then you can sell those proceeds to your customers that want 100 million dollars. But to say you will continue to come to the Central Bank to give you dollars, we will stop it,” the CBN boss said.

Also at the official market, Naira fell to the US dollars a day after it recorded a marginal gain.

Data from the FMDQ securities website showed that at the investors and exporters window, Nigerian currency closed at N416.67 to a dollar on Thursday, representing a N0.3 or 0.10 per cent devaluation from N416.37 it exchanged in the previous session on Wednesday.

Naira devaluation came as traders exchanged $109.75 million which was higher than the $170.94 million recorded on Wednesday.

There was similarly poor performance at the interbank market as Naira exchanged at N417.51 to a dollar from N417.37 a day earlier. Naira against the Pound Sterling on Thursday closed flat at N566.72/£1 and improvement from N586.18/£1

However, against the Euro, Nigerian currency fell to N477.4/€1 from N476.75/€1 it had traded a day earlier.