Speculators and naira traffickers in the unofficial foreign exchange, forex, market have got their fingers severely burnt as the naira climbed to a three-month high at 450 against the United States, US dollar on Friday.
It closed at N450/$, stronger than the N480 to the dollar from the previous day on renewed confidence in the forex market, gaining N75 in just three days after the Central Bank of Nigeria, CBN, introduced new policy actions.
The local currency, which had tumbled to 525/dollar on Monday in the unofficial market, closed at 510/dollar on Tuesday, a day after the CBN commenced the implementation of the reformed foreign exchange policy aimed at boosting dollar supply on the official market.
The new forex policy measures by the CBN made the naira to commenced a gradual reversal of its previous losses, closing at N460/$ on Thursday.
On Friday, the sell rate of the dollar also improved to an average N430/$, as speculators are now wary of buying dollars at higher rate, as many have already lost millions of naira.
The CBN, which pumped more dollars into the market with each bureau de change, BDC, getting $8,000, pledged to sustain the supply.
Some parallel market operators, who spoke to ThisDay, revealed that they had bought huge volumes at over N500/$ in anticipation that the naira will continue to fall, only for CBN to dramatically intervene, leading to the local currency gaining substantially against the dollar.
A CBN official, who pleaded anonymity, told the newspaper that the apex bank is ready to supply the BDC more dollars than they will know what to do with.
According to the official, “We will create supply glut
in the market, school fees, PTA, medical expenses will all be covered, there is enough dollars to go round. CBN is ready to flood the market, we will meet everyone’s dollar need.”
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