First Bank, Travelex impacts fail to help naira, weakens to N470 on renewed shortage
The recent fiscal policy tumble that produced First Bank and Travelex as lead dealers in forex has signaled failure at the parallel market Wednesday.
Otherwise, the naira tumbled to 470 against the United States dollar yesterday; down from 455 on Tuesday as fresh dollar shortage hit the official and parallel foreign exchange markets.
Before yesterday, naira has been relatively stable at N455.
It would be recalled that Travelex and First Bank of Nigeria Limited commenced sale of foreign exchange to Bureau De Change operators following the Central Bank of Nigeria’s approval.
Some traders said “What we get from Travelex is not sufficient,” one trader told Reuters, referring to the demand in the market.
But at the official market, the naira closed at 305.50 per dollar, a level it had maintained for more than two months, supported by the CBN interventions.
It would be recalled that earlier, the CBN asked international money transfer operators to sell dollars directly to the BDC operators to boost liquidity and narrow the gulf between the parallel market and the official market rates.
Dealers say Travelex sells around $15,000 to 1,000 retail currency outlets weekly, but the amount is a fraction of what is required to cover the demand from individuals and small businesses.
However, dollar shortages have caused many firms to halt operations and lay off workers, compounding an economic crisis exacerbated by the fall in global oil price, which accounts for 70 per cent of Nigeria’s budget revenue.
Only two days ago, the President, Association of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwadabe, said the green light given to travelex and First Bank of Nigeria by the Central bank of Nigeria (CBN) to sale dollar direct to BDCs will ease liquidity crisis rocking the money market.
In an interview, he revealed that the CBN brokered a meeting between Travelex and ABCON which led to the commencement of the sale of Forex in Abuja, Kano and by extension, Port Harcourt.
Based on the CBN intervention, both First Bank Nigeria PLC and Travelex will sell Forex to BDCs in Abuja, Kano and Port Harcourt.
According to him, his members in Abuja got $20,000 each from the sale of Forex by First Bank on Tuesday, adding that Abuja environs would also benefit from the sale.
He revealed that to meet with security demands, BDCs operators in Abuja and its environs will begin documentation and biometric registration with Travelex today, Thursday.
Gwadabe explained that ABCON had continued to educate its members on the need to play by the rules of the regulator in ensuring that the Naira recovered fully.
While assuring the apex bank that the automation of its operations was geared to ensure transparency in the Forex distribution network and to frustrate any effort to slow the wheel of progress, Gbadabe appealed to genuine travelers and businessmen to leverage on the gains of the present window in purchasing Forex at the BDCs and other approved places.
According to him, “The naira is expected to appreciate further in Abuja and its environs as the CBN has appointed First Bank and Travelex to sell Forex in that region.
“ABCON is grateful to the CBN, Travelex and First Bank in ensuring that the naira is rescued from the hands of its enemies.”
Analysts say since the CBN appointed First Bank and Travelex to sell the proceeds of Diaspora remittances to BDCs, the naira has continued to appreciate in all the segments of the market.
