The Central Bank of Nigeria on Thursday implemented marginal adjustment of exchange rate from N196.95 to N197 against the United States’ dollar
This adjustment came as the gap between the official and unofficial rate widened in the parallel market. The unofficial rate was N243 against the dollar on Thursday. The unofficial market rate increased following the central bank’s exclusion of more commodities from official sources of foreign exchange to protect the dwindling foreign reserve.
The forex rate adjustment on Thursday was the fifth since the CBN introduced tight controls on the forex market in February. The naira traded at 199.50 to the dollar on the interbank market on Thursday, compared to the 197 per dollar rate at which it closed on Wednesday.
Forex dealers said the outcome of the Monetary Policy Committee meeting of the CBN would affect the exchange rate. “We are very optimistic that the central bank would come out with some measures to support the naira at the end of its MPC meeting on Friday,” the Acting President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe said.
The association asked the CBN to reverse the recent policy requesting BDCs to collect prospective customers’ Bank Verification Number before selling forex to them.
Financial experts are predicting that the MPC meeting would come out with major decisions. Ayodeji Ebo, head, Investment Research, Afrinvest West Africa, expected the MPC to leave all the policy rates unchanged and continue to adopt administrative measures to curb naira volatility while rebuilding external reserves; or increase the naira intervention rate in the interbank market and raise cash reserve requirements to 35 per cent to reduce naira liquidity that could spur FX speculation; or increase monetary policy rate by 50bps to attract foreign portfolio investment, while subsequently loosening restrictions on forex trading.“We place a 70 per cent probability on scenario one, 20 per cent probability on scenario two and 10 per cent on the third scenario,” he said.
By Dike Onwuamaeze