Naira may be on course to regain N1000/$ (an exchange rate though implausible as early as a month ago) in the near time if the current bullish outlook of the market is sustained.
From regulatory directive to market intelligence, it already looks like a fair-weather week for the local currency, which has recorded over 50 per cent gain against the dollar from its high-time low in February.
On the regulatory side, two directives, aimed at unlocking more liquidity into the market, were released yesterday.
Both circulars, market analysts, are optimistic could trigger the dumping of foreign currencies by remnant speculators, who are still holding on the tread, in the coming days.
First, the Central Bank of Nigeria (CBN) informed the Bureau de Change operators (BDCs) of the sale of $10,000 to each BDC at a rate of N1,101/$1.
If the eligible 1,588 BDCs, which the Central Bank attached to the circular, are funded, the weekly sale will increase supply in the retail market by $15.88 million. The operators were to submit documentation for disbursement from yesterday with the dealer sternly warned to abide by the rules.
But the real impact of the amount could come in the form of panic sales of dollars that will follow the announcement in the next few days.
With the operators expected to give to end users at a ceiling of 1.5 per cent margin, the dealers are not expected to sell above N1,117/$.
Hours after the announcement was made, the market started pricing in panic sale as the dollar dropped to about N1210/$ in Lagos where foreign exchange trading has become a buyer’s market.
“We write to inform you of the sale of $10,000 by the Central Bank of Nigeria (CBN) to BDCs at the rate of N1101/$1.
“The BDCs are in turn to sell to eligible end users at a spread of not more than 1.5 per cent above the purchase price,” the circular said.
This would be the third sale of FX to BDCS after the Godwin Emefiele interregnum, which followed the freezing of the BDC segment in 2021. The suspension was lifted some weeks ago with the apex bank rejigging the operating template.
