Nairametrics| In what appears to be the CBN’s next chapter in the handling of the forex policy, the Apex Bank is planning to release about $1 million to meet the demands for payment of school fees, travel allowances and medical expenses. This is according to an article by the Leadership Newspaper.
The paper reports that the CBN “will henceforth give weekly allocations of $1million to Deposit Money Banks (DMB) in the country, while the banks would be expected to sell to their customers at the rate of N375 per dollar.” Quoting what it called a “reliable source”, it said that the CBN was currently “perfecting plans to effect weekly allocations of $1million for the DMB.”
Sources suggest the CBN could be issuing a new policy as early as the next MPC meeting, which will be aimed at solving some of the liquidity issues currently being experienced at the parallel market space. The exchange rate to the dollar depreciated to a record N516/$1 last week as scarcity in the black market persisted. A lot of this is blamed at demand for forex
If the CBN goes on with this plan, then it is likely that we see an appreciation of the Naira. Data from the CBN reveal the CBN had reduced sales to BDC’s by as much as 98% since 2014, dropping from $4.4 billion to just $58 million. See below;