The Central Bank of Nigeria has reduced the amount of dollars it sells to Bureau de Change operators by $25, 000 per week, from $100, 000 to N75, 000.

The CBN, in a circular on Friday, said, “This is to inform all authorised dealers, BDC operators and the general public that effective from the week starting March, 18, 2012, the amount of foreign exchange cash to be sold to BDCs by the CBN shall be $75, 000 per week.”

The apex bank added that the circular superseded the earlier one, which increased dollar sales to $100, 000 per week.

In a bid to check the trend of arbitrage or round tripping created by the widening gap between the official and parallel exchange rates, the CBN last year increased weekly sale of official foreign exchange to BDC by 100 per cent to $100,000 from $50,000.

Prior to that, it had increased to $1m from $500,000 per bank the amount of autonomous foreign exchange banks could sell to BDCs per week, from $250,000.

Meanwhile, the country’s external reserves, which opened at $32.99bn at the beginning of the year, have risen to $34.81bn as at March 15, 2012.

The increase, according to latest figures on the CBN’s website, represents a 5.5 per cent or $1.82bn rise from the January figure.

External reserves stood at N34.67bn as at February 1, 2012 representing 5.09 per cent or N1.68bn increase, as against $32.99bn recorded in January.

Analysts said the outlook for external reserves accretion remained positive in the short term, adding that sustained increase in oil prices and production would continue to boost external reserves growth.

Analysts at Financial Derivatives Company Limited, said, “The exchange rate and external reserves have been stable this year. A strong currency would also serve to boost forex reserve growth, which we expect to grow to $35bn by end of March. This strong level of reserves is the effect of a decline in the use of the external reserves by the

CBN to support the naira value, as well as strong levels of oil production. At $34bn, the level of reserves could still support about six to nine months of imports.”

Source: Punch/Ademola Alawiye