Nigerian black-market speculators have defied the orders of the Central Bank of Nigeria (CBN) as they buy and sell the dollars far above the spread given to them in the new foreign exchange rule governing the Bureau de Change segment of the forex market.
Data gathered across different BDC markets in Abuja and Lagos showed that the naira traded between N915 to N920 per dollar depending on the seller.
The amount is far higher than the N772.12 traded at the Investors’ and Exporters’ Forex Window, renamed, the Nigeria Foreign Exchange Market.
The prices across the two different forex segments are in defiance of the rules set by the Nigerian apex bank on August 17 which prohibit the BDCs from selling or buying dollars above -2.5 per cent or +2.5 per cent of the NAFEM.
The apex bank said, “In support of the drive to improve the efficiency of the Nigerian Foreign Exchange Market, the Central Bank of Nigeria hereby announces the underlisted operational mechanism for the Bureau De Change (BDC) segment of the market:
“The spread on buying and selling by BDC Operators shall be within an allowable limit of – 2.5 per cent to +2.5 per cent of the Nigerian Foreign Exchange market window weighted average rate of the previous day.”
The weighted average for the rate traded at the NAFEM is N772.965 per dollar as of the close of trade on Monday.
Going by the CBN operational mechanism for BDCs, the operators in the segment are supposed to exchange the naira at N792.28 per dollar.
However, the speculators are exchanging the currency at a 19 per cent spread as against the 2.5 per cent directed by the apex bank.
At least each speculator enjoys N147 to N142 arbitrage.
Before the CBN came up with the policy, the naira had traded as high as N955, triggering concerns and doubts about the ability of the CBN to operate a managed float which it introduced on July 14.
JP Morgan Chase & Co in the past week released a report further exposing Nigeria’s vulnerability to Forex shock.
JP Morgan said the net reserves of Africa’s biggest economy fell to $3.7bn in 2022 from $14bn in 2021, a revelation that induced panic in the market.
– THE WHISTLER
