This Week in Forex – Naira Poised to Rebound

The Nigerian naira looks poised for a strong week as the Central Bank of Nigeria (CBN) plans to boost dollar sales to bureaux de change (BDC) outlets or foreign exchange bureaus around the country.

The naira is widely expected to appreciate at the black market this week after CBN proposed an increased dollar sale to retail currency resellers. The retail currency market has been closed since the end of trading on Thursday in recognition of the Easter holidays.

CBN is planning to raise dollar sales to BDCs from the present $20,000 to a 2017 record high $40,000 each, which will boost liquidity and help support the local currency.

Just a little over four weeks ago, CBN capped it’s dollar sales to BDCs at $8,000.

But with rising oil revenues and a increasing balance at the nation’s foreign reserve account, CBN has made an open ended pledge to support the naira.

The local currency was quoted at 410 to the dollar on the black market at the close of business last week compared with 398 to the dollar the previous week.

At the official window it closed at 306.10 to the dollar on Wednesday last week against 306.20 per dollar the previous week.

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