As the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) set to meet on Thursday and Friday, the Naira was stable on Tuesday. This was attributed to the measures deployed by the apex bank to curb speculation on the currency.
Traders also said expectations that the central bank could make pronouncements on the forex exchange market at its monetary policy committee meeting on Friday were supporting the naira.
“Demand for the dollar slowed down a bit today and the naira recovered due to speculations the central bank could intervene in the market this week ahead of its monetary policy meeting,” one dealer said.
The currency closed at N197 to the dollar on the interbank market, unchanged from Thursday’s closing level. Markets were closed in Nigeria on Friday and Monday for public holidays.
The naira was trading at N240 to the dollar at the parallel market on Tuesday, compared with N241 per dollar on Thursday.
Traders also believed the directive by central bank mandating bureau de change operators to request dollar buyers to provide their Bank Verification Number (BVN), a new biometric identification for commercial banks customers, might also be curbing speculative bids.
Operators said the move was meant to help the central bank trace all transactions in the foreign exchange market.
Nigeria’s central bank sells an average of $80 million to bureau de change operators each week, while operators also source dollars from individuals and corporations.