After spate and courageous directives and measures by the Central Bank of Nigeria (CBN) in the last 36 hours, the Naira slightly bounced back in yesterday’s trading. Yesterday’s trading saw commercial banks made frantic efforts to sell their excess foreign exchange (FX) holdings, according to the new rules of the Bank. Treasury departments of Deposit Money Banks (DMBs) processed numerous FX requests and sold more US dollars to customers throughout the day. The increased forex sale activities at the official market resulted in the naira rebounding on the streets. Concerns over long-term foreign exchange positions held by banks to profit from exchange rate volatility prompted the CBN to issue a circular, titled “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks.” The circular aimed to reduce risks associated with banks holding large foreign currency positions. Banks were directed to comply with the new regulations by February 1, 2024. The CBN’s directive, aimed at unifying official and parallel market rates, led to a sharp rebound of the Naira on the NFEM platform. Bureau De Change operators in Lagos, Kano, and Abuja rushed to sell their dollar holdings amid fears of sustained gains. Naira traded between N1,300/$ and N1,350/$ on the streets.
