Naira crashes against dollar, checkout new rate

Nigeria’s currency, naira has today, August 23, weakened against the American dollar at parallel market. The Naira which exchanged at 400/$1 two weeks ago in what came as a surprise to many, started last week at N395/$1.

However, the nation’s currency has yet again shown its inconsistency as it now trades at N397/$1, dropping two points. The reason for this may not be farfetched as just recently commercial banks defied Central Bank of Nigeria’s (CBN’s) directive for them to sell $50,000 weekly from Diaspora remittances to Bureau De Change (BDCs). This was disclosed by Aminu Gwadabe, president of the Association of Bureau De Change Operators of Nigeria (ABCON). Gwadabe said only 10% of BDCs from the Lagos market have so far accessed dollar from banks since the CBN gave the directive nearly three weeks ago.

The banks that are so far involved in the dollar sales include FirstBank, Ecobank Nigeria, Fidelity Bank, United Bank for Africa and Unity Bank. Others are Diamond Bank, Zenith Bank and Stanbic IBTC Bank. Gwadabe regretted that BDCs in Port Harcourt, Kano, Abuja, Onitsha, Maiduguri, Benin and Enugu are yet to get a single dollar from these banks. Gwadabe said: “Instead of staggering the payment, the banks should sell to the BDCs on the same week day, so that the impact will be felt in the market. We also want the CBN to licence more International Money Transfer Operators (IMTOs) to deepen the market. “Our members across the country have funded their accounts since two weeks ago but the banks are not selling to them.

The BDCs that met the CBN’s policy guidelines on the disbursement and cleared by the banks have still not received a dime from the banks. Gwadabe also called on the CBN to outsource the dollar distribution role to independent distributor since the banks have failed in their assigned role. “I think the banks are compromising the policy and CBN’s directive on the matter. And like I said earlier, since the banks are not co-operating, I expect the CBN to take that role from them and assign it to a reputable independent distributor.

The CBN had directed through a circular to authorised dealers that all agents to approved IMTOs sell foreign currency accruing from inward money remittances to licensed BDCs. It said the foreign currency proceeds of IMTOs sold to BDC operators shall be retailed to end users in accordance to CBN regulation. The CBN issued a follow-up circular to all the banks, asking them to sell $50,000 weekly to BDCs. The directive was meant to ensure stability of the exchange rate and encourage participation of critical stakeholders in the foreign exchange market.