- CBN pumps more dollars to BDCs, rate now N450/$
- Many resorting to fake Dubai and Turkish visa/travel tickets from unconfirmed agents to buy PTA
By Obinna Chima
It closed at N450/$, stronger than the N480 to the dollar from the previous day on renewed confidence in the forex market, gaining N75 in just three days as a result of the new policy actions introduced by the Central Bank of Nigeria (CBN).
The sell rate of the dollar also improved yesterday to close N430/$, as against the N460/$ at which it closed on Thursday as speculators are wary of buying dollars at higher rate, as many have already lost millions of naira.
Yesterday, the Central bank pumped more dollars into the market with each BDC getting $8,000. The apex bank has pledged to sustain the supply.
THISDAY investigation revealed that many of the parallel market operators are trying to slow down the fall of the dollar to mitigate the heavy losses they are currently suffering.
A CBN official who pleaded anonymity promised that the bank is ready to supply the BDC more dollars than they will know what to do with.
“We will create supply glut
Further investigation have revealed that many people, smarting from the strengthen- ing naira now fake letter/ travel tickets to Dubai and Turkey with which they apply for PTA in order to benefit from the 20% above the interbank rate for travellers and payment of school fees. This is relatively easy because visas to these countries are stamped on arrival and so don’t need to present it as a pre-condition to purchase the PTA.
Furthermore, as part of efforts to further increase the availability of FX to all end- users, the CBN said it decided to significantly reduce the tenor of its forward sales from the current maximum cycle of 180 days, to no more than 60 days from the date of transaction.
Speaking on the new FX actions, the Chief Executive Officer, BIC Consultancy Services, Dr. Boniface Chizea, pointed out that the reduction of the wide gap between the official interbank window and the parallel market rate was the major reason for the recent changes to the approach to the determination of the exchange rates.
“And if the recent steps did not breach the gap between the official and parallel market we must then consider this experiment a grand failure. But really it is logical that if you remove a large junk of demand from the parallel market as the recent measures are bound to guarantee that the rates would inevitably appreciate.
“One thing you could say about the parallel market rates is that the rates are very responsive to the movement in demand and supply situ- ations. One thing which the monetary authorities must guard against to ensure success is diversion and no round tripping must be countenanced in this respect. Otherwise the full benefits of the recent measures would not be realised,” Chizea added.
On his part, the CEO, Global Analytics Consulting Limited, Mr. Tope Fasua, faulted criticism of what some had described as the frequent changes to the country’s FX rules, saying that “the role of a central bank is to tinker with policies.”
He commended the central bank for what he termed as its dynamism, saying: “Nobody has a singular policy and then goes to sleep. This economy is not a developed economy. Even the developed economies, they tinker with monetary policies. But I think Nigerians should put themselves in the shoes of these policy makers. I am not saying that they get it all the time. A good central bank must be dynamic and that is what we have been seeing.
“You can’t leave FX sup- ply in the hands of BDCs. What they have just done by allowing the banks to open retail outlets in airports is the best because they (CBN) would be dealing with banks that they can control. No matter what some people feel about the central bank, I personally think they are on the right track. If we look at the accretion to the external reserves, you will see that some of their policies are actually having effects. When people need little amount of FX for school fees and PTA, they should be able to get it without hassle and that is what the CBN has done.”