Exchange rate falls to N465/$1 as panic selling takes over

Nigeria’s exchange rate at the parallel market fell to N465/$1, according to information from Aboki FX a website that tracks exchange rate movement. The rate initially fell to N470/$1 when Nairametrics tracked mid-day but has since fallen to N465/$1 by evening.

Nairametrics reported earlier in the day that panic selling was on the mind of most forex traders who fear measures imposed by the CBN might leave them in losses.

Some of these measures or policies by the apex bank which is meant to boost liquidity in the foreign exchange market and conserve forex include; banning of third parties from buying foreign exchange which is routed through Form M. This is to ensure prudent use of the country’s foreign exchange resources and eliminate incidences of over-invoicing, transfer pricing and others.

In a bid to boost forex liquidity, the CBN has threatened to clampdown on exporters who fail to repatriate their forex earnings. They directed banks to submit the names, addresses and Bank Verification Number (BVN) of all the exporters who have failed to repatriate their export proceeds for necessary sanctions.

Also in another forex liquidity boosting measure, the apex bank, last week, announced the resumption of gradual sales of foreign exchange to the Bureau De Change (BDC) operators to cater especially to the retail end of the market and travellers following the planned commencement of international flight operations.

The currency speculators appear to be quite apprehensive as they move to sell off their forex holdings, following fears that some of these measures will strengthen the naira in the coming weeks.