Dollar rockets to N522 as CBN controversial policy kicks in

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The naira is trading at the parallel market at N522 to $1 Wednesday afternoon, checks by Peoples Gazette on Abokifx.com, a popular forex trading platform, have shown.

This change in trade comes after the Central Bank of Nigeria on Tuesday announced that it would discontinue the sale of foreign exchange to Bureau de Change (BDC) operators in the country.

The CBN governor, Godwin Emefiele, after the bank’s Monetary Policy Committee meeting, had accused BDC operators breaching the objectives of their establishment, which is to serve the retail end-users who needed $5,000 or less and began trading in millions of dollars.

The bank will also stop issuing new licences to money changers across the country with immediate effect, Mr Emefiele said in a press briefing on Tuesday afternoon.

The announcement comes as the bank intensifies efforts to control the country’s failing economy and the national currency.

The naira had initially traded for around N150 to a dollar in 2015, before the Buhari-led administration came into power. Since then, the currency has been devalued a number of times to accommodate the discrepancies within the trading windows.

Speculators say the current rates would continue to change over the course of the week.

Analysts at Cordros Research have projected more pressure for the exchange rate at the parallel market as a result of the CBN’s ban. The analysts said this in a post on the Monetary Policy Committee (MPC) report on Wednesday morning.

They said the discontinuation of the sale of foreign exchange to the BDCs would put further pressure on the exchange rate as the commercial banks settle to adjust to the Central Bank’s directive.

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