Exchange Rate Steady As Naira Gains Against Dollar

The exchange rate of the naira against the dollar remained stable for long hours unlike what used to be the case.

This development happened as Naira firmed up against dollar exchanging at N1,200 for the past 24 hours in the parallel market.

The steady rate observed yesterday mirrored Tuesday’s closing rate, signaling a reduction in pressure within the forex market.

In recent times, the local currency has shown signs of swift recovery, with market volatility decreasing following the Central Bank of Nigeria’s (CBN) initiation of dollar sales to bureau de change operators.

The CBN issued a directive instructing authorized dealers to facilitate the payment of Personal and Business Travel Allowances (PTA/BTA) to their customers exclusively through electronic channels, including debit or credit cards, rather than cash.

The bank stated, “In line with the Bank’s commitment to ensure transparency and stability in the foreign exchange market and avoid foreign exchange malpractices, All Authorized Dealer Banks shall henceforth effect payout of PTA/BTA through electronic channels only, including debit or credit cards. For the avoidance of doubt, payment of PTA/BTA by cash is no longer permitted.”

Importers are facing increasing challenges in accessing necessary funds from both the official FX market and the black market.

The demand for foreign currency stems from legitimate needs such as Form A applications for Business Travel Allowance (BTA), Personal Travel Allowance (PTA), school fees, and medical expenses. Small and Medium Enterprises (SMEs) are also affected by the scarcity, as evidenced by the utilization of Form Q.

Reflecting on the situation, a street trader informed Business Day on Tuesday morning, “The problem is that dollars are scarce in the market. People are not bringing dollars and demand is so high that is why the price is going up.”