Capital Market Finance

Naira slumps, exchanges for 504/$ at parallel market

The naira exchanged to the dollar at N504 at the parallel market on Friday, according to the Bureau de Change operators.

It had earlier exchanged to the dollar at 500 in the previous week and at N490 a month earlier. According to naijabdcs.com, the Central Bank of Nigeria’s official rate for the BDCs, the dollar was bought and sold at the rate of N503 and N504 as of Friday evening.

The CBN in May adopted the NAFEX Investor & Exporter forex window rate of N410.25 as its official exchange rate to the dollar.

It would be recalled that in April 2017, the CBN established the I&E forex window as part of efforts to deepen the foreign exchange market and accommodate all forex obligations.

The purpose of the window was to boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.

The CBN had also disclosed that it was increasing the amount of foreign exchange allocated to banks to meet legitimate needs.

This followed the warning by the CBN Governor, Mr Godwin Emefiele, to Deposit Money Banks to desist from denying customers the opportunity to purchase foreign exchange.

The purposes to access forex included Personal Travel Allowance, Basic Travel Allowance, tuition fees, and medical payments as well as Small and Medium Enterprises transactions or for the repatriation of Foreign Direct Investment proceeds, the CBN had stated.

Under the new dispensation, Nigerians travelling abroad could access a maximum amount of $4,000 foreign exchange from the banks, while those travelling on business trips could also access a maximum amount of $5,000 for each trip.

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