Naira gain: Pressure Mounts On FX Hoarders To Sell Off Dollars

The pressure on individuals, banks and Bureaux de Change (BDC) operators to offload their excess dollars and other foreign currencies is not about to wane as the raft of policy measures introduced by the Central Bank of Nigeria (CBN) continue to dig in.

The naira which last month fell to a low of N1,778.25 to the dollar, weighed down by high demand for the U.S. currency and outstanding forwards on the currency that needed to be settled by the Central Bank bounced back during the week , firming to N1,312.51 per dollar at the weekend, after the CBN said late on Wednesday it had cleared its entire verified foreign exchange backlog.

A BDC operator, Mallam Yakubu Salisu, said ‘people “are willing to exchange their dollars now more than ever before because of fears that it might crash further in the coming days.”

The apex bank had last month announced its decision to sell foreign exchange worth $20,000 to each eligible Bureau De Change operator across the country.

The development came three years after the former CBN governor, Godwin Emefiele, announced the suspension of foreign exchange sales to BDC operators.

According to data obtained from the CBN website, there are 5,690 BDC operators nationwide.

However, about 1,373 BDC operators have been screened to get the allocation. The breakdown includes Abuja, 186; Awka, 26; Kano, 376; Lagos, 785.

On July 27, 2021, the CBN discontinued the sale of foreign exchange to BDCs accusing them of trading FX wholesale that amounts greater than USD 5000, in contravention of their licences, and Nigeria’s FX regulations.

The latest circular, “Sale of Foreign Exchange to Bureau de Change Operators to meet retail demand for eligible invisible transactions” approved resumption of sale of dollar to BDC operators

It noted that the move aimed at rectifying the persisting distortions in the retail segment of Nigeria’s foreign exchange market and bridge the widening gap in the exchange rate.

It said the allocation would be sold at a rate of N1,301/$, reflecting the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market as of the previous trading day, dated February 27, 2024.

This means BDCs will buy at N1,301 and sell at ₦1,314.01.

Sell dollars in your possession as an act of patriotism, Oluwo charges Nigerians
The Oluwo of Iwoland, Osun State, Oba Abdulrosheed Adewale Akanbi, told The Nation that he has converted all the dollars in his account into naira and asked other Nigerians to do same to save the national currency.

According to the monarch, the availability of dollars in the market would reduce the exchange rate, and ultimately checkmate inflation hitting hard on Nigerians.

He stated that dollar hoarders are parts of those frustrating the economy, asking them to be wary of posterity.

The oba,in a statement through his press secretary, Alli Ibraheem, said those hoarding dollars only ended up creating artificial scarcity,“thus leading to high exchange rates and ultimately to inflation.”

He said:”Pumping the hoarded dollars in circulation will lubricate our economy and decimate the hardship on innocent masses. As I speak, I’ve emptied my dollar account. We can only get there if we are ready to sacrifice by jettisoning selfish economic policies capable of suffocating our survival.

“Nigerians are equally enjoined to patronize made-in-Nigeria products. I’ve taken that lead among the traditional rulers. I was the first Nigerian monarch to buy a made-in-Nigeria Innoson vehicle. My wears, most especially, the ofi are hundred percent made in Nigeria. With public enlightenment on the patronage of Nigerian goods, we can have a more prosperous and friendly economy.”