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Naira rises to N359/$ in Investors/Exporters window

Tuesday, 4 July 2017


The naira yesterday recorded its biggest daily appreciation of N6 against the dollar in the Investors & Exporters (I&E) window, with the exchange rate falling to N359 per dollar.

The naira also appreciated by N1 in the parallel due to weak demand for dollars.  Vanguard survey revealed that the parallel market exchange rate dropped from N366 per dollar last week Friday to N365 at the close of business yesterday.

Data from the Financial Market Dealers Quote (FMDQ) for transactions in the I &E window, also known as the Nigeria Autonomous Foreign Exchange Market (NAFEX), showed that the indicative exchange rate for the window dropped to N359 per dollar at the close of trading from N366.44 per dollar last Friday.

The data also indicated that $86 million was traded yesterday. A survey of markets in the Bureau de Change segment (BDCs) in Abuja, showed that the naira exchanged at an average of N360 to a dollar in the BDC segment of the market.

The acting Director, Corporate Communications, Mr Isaac Okorafor in a statement on Monday in Abuja said that 100 million dollars was offered to authorised dealers in the wholesale window.

Similarly the Small and Medium Enterprises (SMEs) window was allocated the sum of 50 million dollars.

Also, those seeking forex for the purpose of business and personal travel, tuition and medical bills, among other invisibles, received the sum of 45 million dollars.

Okorafor said that the Bank’s continued intervention was aimed at strengthening the international value of the Naira, while ensuring accessibility to the greenback by customers who required it for genuine purposes.

It will be recalled that the CBN in the last round of forex intervention in the inter-bank market on June 28, injected 195 million dollars to the wholesale, SMEs and invisibles segments of the market.

In the meantime, several Bureau De Change (BDC) operators are accusing Travelex Nigeria of delaying cash refund from failed foreign (forex) exchange bids.

The BDCs insist that refunds from unsuccessful bids, which should come between 24 and 48 hours, take two or more weeks, with the affected BDC operators staying out of business.

Such practice, financial pundits said, may be hurting efforts by the Central Bank of Nigeria (CBN) to deepen dollar supply and strengthen the naira against the dollar.

Travelex, a global forex dealer was authorised by the CBN to directly disburse forex to BDC operators who have fully completed documentations and provided adequate funding to Travelex Nigeria for their (BDCs) weekly dollar purchases.

The CBN had approved $40,000 (N15 million) weekly per BDC to deepen dollar liquidity, sustain operators’ businesses and achieve naira stability. The funds come in two-tranches of $20,000 and can only be accessed by operators with successful bids, and have met full regulatory requirements.

“When BDCs pay through their banks pay to Travelex and the bids are not successful because of incomplete documentation or any other issue, the funds coming back remain a herculean tax. Many of us just keep waiting endlessly to get the funds back and that is affecting our operations and hurting the expected impact on the economy,” an operator who asked not to be named said.

Speaking further, the source said that in many occasions, Travelex claimed that the funds have been refunded to the beneficiaries’ accounts, but the refunds were still not received.

Confirming the development, President, Association of Bureau De Change Operators of Nigeria (ABCON) Aminu Gwadabe, said the delay in refunding such cash remains a serious challenge to many BDCs, especially with many operators not having extra cash to go for fresh bids.

He said many operators affected by the refund crisis always wait for the cash to come, which normally takes time, and at the detriment of their business.

He said that Travelex Nigeria has identified the problem, and promised to work with its bank to develop a technology that will enable it identify and refund unsuccessful bid cash immediately.

But when contacted, General Manager, Travelex Nigeria, Anthony Enwereji, said many of the BDCs do not make their payments through the right channel. He said some operators pay through Automated Teller Machines, some pay through their wives accounts, making reconciliation difficult.

He said the CBN had investigated some of the BDCs complaints against his company, and found out that Travelex Nigeria was not liable.

Enwereji said there were three parties to the BDCs transactions- the BDCs’ banks, the Nigeria Interbank Settlement System (NIBSS) and the beneficiary account. He insisted that it was wrong to blame Travelex Nigeria for the problem.

He said his company was working on technology-driven reconciliation to ensure that the problems were solved speedily. He said his company had been processing over 1,600 bids from BDCs twice weekly, and had done its best to provide them quality services.

Travelex is the world’s largest foreign exchange bureau specialized in international payments, bureaux de change and issuing prepaid credit cards for use by travelers. In 2000, it bought Thomas Cook’s worldwide forex business for 440 million Pounds Sterling, which significantly expanded its international operations.

Credit: Maritimefirstnewspaper with additional report from The Nation and Vanguard

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