BDC Operators Drop Dollar Rate As Buhari Unveils New Naira Note

The dollar rate in the black market dropped, hours after President Muhammadu Buhari and the Central Bank of Nigeria (CBN) unveiled the new naira note.

In a chat with Prime Business Africa, a Bureau De Change operator in Ogba area of Lagos State, informed that the exchange rate between both currencies fell to N780/$1 on Wednesday evening. 

The rate to exchange the United States dollar was N785 on Tuesday evening, indicating the naira appreciated by 0.6 per cent, representing a N5 drop in value of the dollar. 

The depreciation in dollar value coincided with the unveiling of the new naira notes, which carried new colours but maintained the images, designs, and inscriptions on old notes. 

It had been reported that the decision of the central bank to redesign the naira will cause too much naira to chase small dollars in the black market where persons with illegal businesses often exchange the local currency for the American greenback. 

The former Deputy Governor of CBN, Kingsley Moghalu, had stated that “people who are holding huge amounts of cash outside the banking system for nefarious reasons will go the parallel forex market to buy hard currency, putting further downward pressure on the value of the Naira as too much Naira will be chasing too few dollars.” 

Since CBN revealed its plan to change the naira, the Nigerian currency has been fluctuating in the black market for a number of reasons. There were false reports that the United States government intended to change its currency, the USD, just as the Economic and Financial Crimes Commission (EFCC) arrested some BDC operators. 

Meanwhile, Moghalu’s assertion became obvious in the official market, as the cost of the dollar went up by 0.02 per cent, with traders buying the American currency at N445.50/$1 on Tuesday. 

Data obtained from the FMDQ securities, the platform for the official market exchange rate, indicate that the value of naira dropped by N0.12 kobo, against  the rate of N445.38/$1 a day before. 

Official market trading on Tuesday, as observed by Prime Business Africa, showed that traders transacted $74.72 million worth of forex. This is below the $83.57 million that was exchanged on the investors and exporters window on Monday.