Dollar is coming down: Nigerian man speaks on the secret behind naira rise
- A Nigerian man shared some of implemented strategic measures by the CBN to strengthen the Naira against the US Dollar that is working
- He said increase better regulation of Bureau De Change (BDC’s) and actions against market-distorting operations contributed
- He also mentioned clearing FX backlog and CBN actions against Binance proved pivotal
In a recent development, the Nigerian Naira has been observed to gain against the US Dollar in the foreign exchange market.
A Nigerian man has shed light on the reasons behind this positive trend on X (formerly Twitter).
The man listed reason for the rise. Photo credit: @adekbolajiSource: Twitter
CBN’s Strategic Moves
The Central Bank of Nigeria (CBN) has taken several strategic steps to strengthen the Naira, he said. Firstly, the CBN has crashed the price of the dollar to match, and even go below, the rates in the parallel market. This move provides an incentive for those trading in the black market to shift their transactions to the CBN.
Crude Sales and Dollar Receipts
The CBN is now the primary recipient of the receipts from crude sales, he indicated, which means they get the dollars first. This has helped in maintaining a steady supply of dollars.
Market Efficiency and IMTO’s
The CBN has issued memos and regulations for International Money Transfer Operators (IMTO’s) on pricing. This means that they are not constrained to quote rates that the CBN wants, leading to improved market efficiency.
Better Regulation of BDC’s
Bureau De Change (BDC’s) are being better regulated to ensure that they don’t go beyond the spread of the amount given to them. This has helped in maintaining market stability.
Binance Operations
The operations of Binance, a popular cryptocurrency exchange, had distorted the market as people manipulated rates there and the parallel market used it as a guide. Taking action against them was a masterstroke by the CBN.
Clearing Off Backlog
The CBN has been clearing off backlog, which means that it can be trusted when it’s time to repatriate funds. This has increased confidence in the market.
In conclusion, the Nigerian man (@Adekbolaji) said these strategic moves by the CBN and other market factors have contributed to the Naira gaining against the dollar in the foreign exchange market.
See his X post below:
Man who saved in dollars laments
Meanwhile, Fox Nigeria earlier reported that a Nigerian man who saved his money in dollars has lamented that he is at a loss because the exchange rate is going down.
The Central Bank of Nigeria (CBN) recently said it would sell a dollar to Bureau de Change operators at N1,251.
Also, the CBN insisted that BDCs must sell N1,269/$1. This means those who may have saved their money in dollars hoping for an increase might be at a loss.
Source: Fox Nigeria
