LEGIT NG
The Nigerian naira’s exchange rate has worsened against the dollar and Great Britain’s pound.
Findings by Legit.ng showed that the naira to pound was trading at N2,060/£1 on Monday, February 19, 2024.
This is against the N1995/£1 it closed the previous trading day, representing a 3.26% decline.
Similarly, the naira to dollar fell as some traders in the street sold for N1,700/$.
Earlier, Bloomberg reported that the naira slumped 1.8% to N1,645 to the dollar on Friday in street trading. This depicts a 3.34% decline in value.
CBN in a drive to ensure dollar availability
Punch reported that despite increased dollar availability, trading operations over the course of eleven days through the Nigerian Autonomous Foreign Exchange by Deposit Money Banks resulted in a total transaction volume of $3.83 billion.
Data between February 2 and February 15 from FMDQ Securities currency, a platform that reports on official foreign currency trading in the nation, indicated an increase in FX transactions.
The principal forex sellers at NAFEM include commercial banks, the Central Bank of Nigeria, and foreign oil companies.
The Central Bank of Nigeria ordered banks to sell their surplus dollar stock and provide liquidity in the foreign exchange market, which is how NAFEM’s liquidity was boosted.
The FX prudential guidelines ordered banks not to exceed a new threshold. According to the FMDQ data, banks caused others to sell $1.97 billion during the first week of the CBN circular.
A prior circular issued by the CBN directed Deposit Money Banks to divest their surplus dollar stock due to the increasing trend of banks maintaining substantial foreign currency positions. Lenders were cautioned not to stockpile surplus foreign currency for financial benefit.
The apex bank released another set of guidelines that stopped banks from paying Personal Travel Allowance to their customers in cash.
