Currency speculators from Chad, Ghana, Benin Republic and other neighbouring countries yesterday trooped to Nigeria in a scramble for cheaper dollars.
The speculators, The Nation learnt, took advantage of the early morning drop in dollar rates — at N202 to the dollar in Abuja and N210 in Lagos — to make brisk purchases.
But the greenback recovered late afternoon to close at N208 and N222 in Abuja and Lagos.
Banks have been rejecting dollar deposits across the counter, but inflows from foreign accounts are allowed. They lenders said they are unable to transfer excess liquidity to their correspondent banks overseas which are restricting importers from using domiciliary accounts.
The CBN said it would continue to curtail the acceptance of foreign currency cash deposits, much the same way as customers in other countries cannot just walk into banks and make foreign currency cash deposits without proper documentation.
“We wish to assure all citizens seeking foreign currencies for legitimate personal and/or business interests that there remains ample opportunity to do so within the law. The CBN’s Foreign Exchange Rules have many windows for accessing foreign exchange for legitimate business as well as for personal commitments including payment of medical bills, school fees, mortgages, demand notes and other bills,” the CBN said.
The naira rate represents a sharp rise from N240 a week ago, as commercial banks continue to reject cash deposits in dollars, traders said.
On the official interbank market provided by the CBN, the naira traded at the pegged rate of N197 to dollar.
Association of Bureau de Change of Nigeria (ABCON) President Aminu Gwadabe told The Nationthat the rejection of dollar deposits was still ongoing and was marginally changing the status of the local currency.
“Banks are rejecting dollar deposits. They are not able to transfer excess liquidity to their correspondent banks abroad which is restricting importers from using domiciliary accounts,” he said.
Gwadabe, who confirmed the temporary gain made by the naira in the morning, said: “By yesterday’s morning, many people who had stockpiled dollars rushed to sell and there were equally willing buyers in the market. But later in the afternoon, the rush subsided. We noticed that majority of the buyers were from neigbouring countries of Ghana, Chad and Benin Republic who wanted to take advantage of the low dollar rate.”
He said the Bureau de Change segment of the market was in disarray over the CBN directive that they sell dollars to small-scale users as long as this is to meet genuine needs, and documentation to the CBN, including the customer’s Bank Verification Number (BVN) is provided.
Gwadabe said the Nigeria Interbank Settlement System (NIBSS) portal required by the BDCs to implement the BVN directive was not available, but the CBN insists that the portal must be used.
He said a gradual appreciation of the currency would require building confidence in the financial system and price of crude oil in the international market. “This is what is going to drive the exchange rate now and beyond. We cannot isolate what is happening in the global economy like the issue of diversification of energy sources,” Gwadabe said.