The gap between official and parallel markets has narrowed to just N3 as the Nigerian currency continues to depreciate without continued interventions by the Central Bank of Nigeria (CBN) in the FX market.
In the last three weeks, the apex bank has failed to sell forex to Bureau de Change (BDC) operators, leading to the depreciation of the local currency in the parallel segment of the FX market.
On Friday, May 10, 2024, the naira dropped in value to N1,479 per dollar in the parallel market.
The current value represents a 1.38% depreciation from the N1,450 recorded on May 9, 2024.
BDC operators quoted the buying rate of the dollar at N1,430 and the selling price at N1,470.
Meanwhile, in the official market, the naira depreciated by 0.45% to N1,466 on Friday, May 10, 2024.
Data from the FMDQ Exchange reveals that the naira recorded a high of N1,490 per dollar and a low of N1,322.
The current figure leaves an exchange rate gap of N3.69 per dollar between the official and parallel markets.
According to reports, the CBN reviewed its directive on repatriating FX proceeds by international oil companies (IOCs).
The bank said the initial 50% of the repatriated proceeds can be pooled immediately as at and when needed.
It said that banks may submit the request for cash pooling ahead of the expected date of receipt, aided by required documentation for approval by the CBN.
CBN said:
âThe 50% balance of the repatriated export proceeds could be used to settle financial obligations in Nigeria, whenever required, during the prescribed 90-day period.â
The CBN had placed a limit on transferring proceeds from crude exports by IOCs to offshore parent company accounts as part of reforms to curtail volatility in the forex market.
The bank stated that the transfer of funds by IOCs impacted the liquidity in the forex markets.
The development comes as data from the CBN reveals an uptick in reserves, closing at $32.369 billion as of May 7, 2024, up from the $32.107 billion recorded in the previous month.
Nigeriaâs reserves have experienced a steady decline from $34.45 billion in March 2024 due to falling oil prices, debt servicing, and other CBN obligations.
The decline in the reserves led to the speculations that the apex bank was defending the naira with reserves.
TimesNow.com.ng earlier reported that the Nigerian currency, the naira, closed weaker at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, May 8, 2024.
