BDC Traders Sell Dollar at New Exchange Rate As Naira Stands Firm in Official Market
- BDC traders are selling the US dollar at a new exchange rate as the naira improved in performance in the official market
- New data shows that the naira is stable in the official market and has also appreciated in the black market
- The excellent performance of the naira in the foreign exchange market is thanks to the increase in dollar supply
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Nigerian currency maintained stability against the US dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Data from FMDQ securities showed that on Tuesday, May 28, 2024, the naira closed at N1,339.33/$1, the same rate as the previous day.
Source: Getty Images
This happened as the dollar supply increased significantly to $328.32 million on Tuesday, 81.6% higher than the $180.80 million recorded a day earlier, or $147.52 million.
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The rise in dollar supply can be connected to the Central Bank of Nigeria (CBN) FX inflows from treasury bills and OMO bills sales.
Also, CBN data showed that in the official market, the Nigerian currency improved its value against the pound sterling by N121.85 to sell for N1,762.43/£1 compared with Tuesday's rate of N1,884.28/£1.
It was a similar story for the naira against the euro, as it appreciated by N106.73 to settle at N1,500.58/€1, compared to the previous rate of N1,607.31/€1.
Naira to dollar at black market
In the black market, traders who spoke to Legit.ng on Wednesday said the dollar now sells below N1,500.
Abudulahi, a BDC trader, told Legit.ng:
"We now buy dollars from Nigerians at N1,460 and sell at N1,480. The market is improving, the demand for dollar has reduced a bit in the last 2 days."
CBN issues new directives on street trading
Legit.ng previously reported that the CBN banned street trading of foreign currencies by Bureau de Change (BDC) operators, citing the need to regulate the foreign exchange market properly.
CBN's director of risk management, Blaise Ijebor, said street trading of foreign currencies is not allowed as the apex bank does not want BDCs under trees.
He said the traders should be in offices where customers can come in and change their currencies.
Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
