Naira gains strength against the dollar as CBN sets Bureau De Change operators’ profit margin at 1.5%. Explore the impact on the forex market.
On Thursday, the Nigerian official market witnessed a strengthening of its currency Naira to trade at N1,566.82 per dollar.
The Nigerian Autonomous Foreign Exchange Market (NAFEM) overseen by the FMDQ Exchange has reported that the Naira increased in value by N14.83, equivalent to a 0.937 percent rise compared to Wednesday’s rate of N1,581.65 per dollar according to data available from them.
On Thursday, the daily trading volume experienced a notable increase of $273.14 million compared to the preceding day’s $108.16 million.
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The Naira was exchanged at a range of N1,650.00 to N1,500.00 per dollar at the Investor’s and Exporter’s (I&E) window.
In the meantime, the Central Bank of Nigeria (CBN) has mandated Bureau De Change (BDC) operators to limit their forex profit margin to 1.5 percent as a part of continuous reforms aimed at eradicating market distortions.
Exchange rate disparities, especially in the parallel market, are attributed to persistent discrepancies observed in the retail market according to a statement issued by CBN.
Each BDC is now authorized to buy a maximum of $20,000 at an exchange rate of N1,450 per dollar based on the reduced trading rate from the previous NAFEM meeting.
Eligible end-users can purchase from BDCs at a maximum profit margin of 1.5 percent above the CBN rate.
