Suspense In Black Market As CBN Orders Banks To Freely Buy, Sell Dollars

There are indications that the Central Bank of Nigeria, CBN has directed banks to trade foreign exchange at any exchange rate in the Investors & Exporters window based on willing buyer, willing seller arrangements, a move that may have put the unofficial naira black market for dollars in suspense.

lead to the abolition of the naira black market for dollar.

According to news reports, the I&E window exchange rate rose sharply to N610 per dollar, as at N12:50 pm on Wednesday after from N471.67 it traded last on Tuesday night.

GWG.ng reports that the apex bank is yet to make a comment on the development and it follows controversies a week ago when a major newspaper revealed that the CBN was set to devalue the naira by allowing the exchange rate to flow up to N750.

Though the CBN is yet to issue a statement to this effect, two banking executives, however, confirmed to Vanguard that it is true that the CBN has given the directive to the banks.

Meanwhile, an investment banker and the Co-founder, Comercio Partners, Nnamdi Nwizu, said the immediate impact of the directive is enhanced foreign exchange inflow into the economy and further rise in the inflation rate, as the I&E window exchange rate rises aggressively as already seen today.

It is also believed that the move could inevitably lead to a direct threat to the buoyancy of the naira black market for dollars, an alternative market that many Nigerians have depended on for their foreign exchange needs.

Vanguard Economy Editor, Mr Babajide Komolafe told GWG.ng that while the move by the CBN may not lead directly to the abolition of the naira black market for dollars and other foreign exchange, but that it would to some extent affect activity in that sector of the economy.

“What will happen is that because of the increased flow of foreign exchange to the banks people who want to transact will now have the confidence to go to the bank given that they will be selling or buying the dollar at about the same amount that they could have gotten it at the parallel market or the black market as some call it.

“This has been done before and it is not expected to abolish the black market as you call it,” Mr Komolafe one of Nigeria’s leading financial journalists told GWG.ng on the impact of the CBN move on the naira market for dollars.

Meanwhile, a black market operator in Lagos confirmed to GWG.ng that the move was yet to directly affect the rate with the dollar trading at N762 to the dollar on Wednesday afternoon, saying that they remained in suspense over the development.

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