The naira has continued in its resurgence against the dollar in
the black market as financial speculators encounter losses.
Black marketers this week hit rock bottom as several
interventions of the Central Bank of Nigeria (CBN) in the forex
market bolstered the value of the naira, which rose to N390
to the dollar yesterday.
The Naira, which also appreciated against the Pound Sterling
and Euro rate, traded at N510 and N415 respectively, even as
operators and analysts said they expect the trend to continue.
The CBN had over the weeks sold dollars at the interbank and
bureau de change market, clearing backlog of dollar demands
and meeting forward contracts, as well as BTA/PTA, school
fees and medical fees demand.
Briefing journalists on the outcome of the Monetary Policy
Committee (MPC) meeting in Abuja on Tuesday, CBN
governor, Godwin Emefiele said the apex bank was
determined to see the convergence of rates at the foreign
Noting that the apex bank was optimistic that the rate
between the official and parallel market would converge
further, he assured that the bank could sustain the policy.
According to him, currency speculators who doubt the ability
of the bank to take decisions and implement the policy were
taking a great risk.
Emefiele had also warned speculators to desist from stocking
dollars at home because the CBN intervention would crash the
price of dollar, which was already happening.
From a low of N500 to the dollar in February this year, the
value of the naira had appreciated at the parallel market, as
the CBN intensified its dollar sales, following a meeting with
the Vice President.
Likewise the rise in the price of crude oil at the international
market, coupled with increased output as soon as Niger Delta
militants stopped blowing up pipelines boosted the country’s
foreign exchange revenue and, consequently, the foreign
Nigeria’s foreign reserves this month crossed the $30 billion
mark and is currently trending towards $31 billiion, further
boosting the ability of the CBN to continue its consistent
So far, it has sold $1.7 billion dollars in forwards as well as
other legitimate dollar demands through banks and BDCs.
Black market currency traders in Lagos who spoke with
LEADERSHIP last night said the value of the naira had risen
to N415 by afternoon and rose further to N395 by the close of
business in the evening.
One of the Bureau de Change operators, simply known as
Tijanni Jos, said that the development had caused operators
to lose a lot of money.
According to him, operators did not envisage a quick downfall
of the dollar which has caused them to buy at an expensive
rate, hoping to make returns.
Jubril, a currency trader in Lagos said, “I have not been able to
sell the dollars that I have with me because I bought it at
N420 and now it is priced at N395. People are not buying,
they are selling and I believe that the naira will go up more
this week and next week”.
This was corroborated by the president of the Association of
Bureau de Change Operators (ABCON), Aminu Gwadabe, who
told a reporter that 90 per cent of the speculators have been
burnt badly by the appreciation of the naira.
According to him, the recent steps taken by the CBN had
eliminated most of the “frivolous demands and those
demands that do not add value to the economy”. He added
that most of them who had envisaged that the naira will
continue to depreciate had been disappointed.
“People are not buying dollars anymore for now. They are
waiting for a level where the CBN cannot go beyond before
they demand for dollars again”, he stated.
He, however, noted that the CBN could sustain its present
intervention levels considering the rising fortunes of the
Explaining that the interventions have been successful so far,
Gwadabe said increased inflow from crude oil sales was
bringing in “nothing less than $30 million everyday for the
He continued: “We are saving about $13 per barrel through
the difference between the benchmark and selling price of oil.
The selling price is about $56/57 per barrel, while our
benchmark is $40.
“This has increased our buffers and then there is the foreign
exchange that is expected to come in through the various
loans. If all these come into play, then the CBN will be able to
sustain the interventions and meet all legitimate demand”.
Also speaking, Chief Executive of Cowry Assets Management
Limited, Johnson Chukwu, said the understanding between
the fiscal and monetary authorities will give ability to the
central bank to continue its interventions.
Observing that the capacity of the apex bank had been
limited by a low inflow of foreign investors, he said the
accretion of forex from crude oil sales as well as expected
inflow from multilateral loans will give the CBN the needed
“The $500 million Eurobond which the government will go back
to the market to raise, the $1.3 billion from China EXIM Bank,
the $1.6 billion from World Bank and then the balance of
$600 million from the African Development bank”, Chukwu
Also speaking with LEADERSHIP yesterday, Dr. Tayo Bello
commended the CBN for plugging the loopholes in the forex
market which was being exploited by currency speculators
who were holding the greenback before now, thereby creating
artificial scarcity in the market.
He said the CBN’s move to flood the market with more forex,
thereby creating a glut in the market, was unprecedented.
Bello said, ‘‘What we had before was an unprecendedted
demand for forex fuelled by unprecedented corruption where
people look for forex which are not being chamnnlled into
productive uses but now CBN is nomlising everything”.
He also expressed hope that if the peace in the Niger Delta
region of the country could be sustained, the CBN will be able
to susutain its intervention in the market.
“Dollar will still sell for N250 in the few weeks to come.
Currency speculators are in trouble because what happened in
the stock market when the bubble burst is already happening
to them. They are already committing suicide and more will
still commit suicide”, Bello noted.
He enjoined Nigerians to have faith in the country, as that
was the only way to get the nation’s economy out of