Nigeria’s Naira firmed 1.1 percent to N510 to a dollar on the black market, bureau de change (BDC) traders said, after the Central Bank of Nigeria (CBN) started supplying dollars for retail transactions in a bid to narrow the spread with the official exchange rate.

Most BDCs were showing only offers to sell at 510 with no bids, having sourced dollars privately at peak rates of N 520 per dollar. The naira was quoted at 305.25 per dollar on the official market. The CBN stepped up dollar sales on the interbank currency market on Tuesday, a day after it effectively devalued the naira for retail currency sales.

The Central Bank of Nigeria has said, as part of its efforts to alleviate the sufferings experienced by Nigerians, who source forex for school fees, medicals and personal traveling allowance (PTA), it has decided to fund banks directly with additional forex to satisfy their obligations.

Preparatory to providing the additional forex, the CBN had, last Thursday, pegged the exchange rate for payment of the school fees, and personal travel allowance (PTA) and medicals at N375 to the dollar. According to CBN spokesman, Isaac Okoroafor:  “The Central Bank of Nigeria has taken a decision to directly fund banks with additional foreign exchange to be able to take care of some personal travel allowance, school fees and medical payments. With that, we have tried to set an exchange rate for those transactions at 20 per cent above the interbank rate – that is, 20 per cent above the interbank rate that ranges between N305 and N315.”

The CBN spokesman advised Nigerians, who have legitimate reasons to procure forex to approach their banks, where their needs would be catered for rather than go to the parallel market. “The banks have been directed to sell to all the people that will come up for it and they actually have been directed to open up avenues at the airport so that they can deal with these demands,” he explained.