Naira Gains As Banks Compete To Meet Dollar Demand

The naira strengthened against the dollar at the end of Monday's trading, piling up losses for black market speculators who have been stocking up the dollar.

Nigeria's currency gained 0.58 percent on Monday to close at N512/$ from Friday's N515/$ at the parallel market and has gained N13.00 since July 28th.

Naira dropped sharply to N525 against the dollar last week after the Central Bank of Nigeria (CBN) announced that it would discontinue the sale of dollars to the Bureau De Change (BDC) operators due to foreign exchange arbitrage. Black market speculators in response to the announcement began to stock up the greenback in anticipation of a steeper fall in the naira's value.

However, the local currency started firming up on Thursday, the following day after the Nigerian banks’ chief executives unanimously agreed to support and meet legitimate demand for dollars by the end-users.

Banks then launched a promotional campaign to help consumers understand where they can obtain dollars and how to do so.

Commercial banks have now assured individuals via emails that you can walk into any branch to buy dollars for school fees, medical bills in foreign countries, and other foreign exchange transactions.

Week-on-week, the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rose marginally by 6pbs to close at N411.44/$1 while the parallel market fell N13.00 w/w to close at N517.00/US$1.00.