The Naira Rebounds Even After CBN Restrictions, Now N224 To A Dollar

The naira eased against the dollar on the parallel market on Tuesday driven by demand mainly from individuals travelling abroad for summer holidays and importers, traders said.

Reuters News Agency is reporting that the local currency was quoted at 224 naira to the greenback on the unofficial market, 0.89 percent weaker from 222 naira the previous day, traders said.

On the official interbank market, the naira ended at 197, a level it has been stuck at following a central bank’s peg on the exchange rate in February.

“We’ve seen a surge in dollar demand … since Friday,” Harrison Owoh, a Nigerian bureaux de change (BDCs) agent said, adding that the central bank may sell dollars this week.

Owoh said the bank sold around $160 million to BDCs last week to increase dollar supply.

BDCs are allowed to sell up to $4,000 as personal travelling allowance and $5,000 as business travelling allowance.

However, individuals sometimes buy above the stipulated dollar limit from the undocumented parallel market.

The naira firmed to 216 on the parallel market last week after commercial lenders stop accepting hard currency cash deposits on central bank orders, fuelling excess dollar liquidity on the parallel market.

The bank has also directed lenders to pay for dollars purchased at the official market 48 hours in advance, tightening naira liquidity.