Yesterday, the naira closed at N1,200 to the dollar in the parallel market, showing an improvement from the N1,218 to the dollar rate observed on Monday, indicating an appreciation of N18 to the dollar.

The local currency has of recent commenced rapid recovering, as volatility in the market dropped after the Central Bank of Nigeria (CBN) commenced dollar sales to bureau de change operators.

The CBN recently directed that authorised dealers to pay Personal and Business Travel, allowances (PTA/BTA) to their customers through electronic channels only, including debit or credit cards instead of cash.

“In line with the bank’s commitment to ensure transparency and stability in the foreign exchange market and avoid foreign exchange malpractices, All Authorised Dealer Banks shall henceforth effect payout of PTA/BTA through electronic channels only, including debit or credit cards. For the avoidance of doubt, payment of PTA/BTA by cash is no longer permitted,” the apex bank said.

Importers are finding it  difficult to secure the funds from the official FX and black markets.

Legitimate needs driving the demand include Form A applications for Business Travel Allowance (BTA), Personal Travel Allowance (PTA), school fees, and medical fees. Small and Medium Enterprises (SMEs) are also grappling with the scarcity, as highlighted by the use of Form Q.

“The problem is that dollars are scarce in the market. People are not bringing dollars and demand is so high that is why the price is going up,” a street trader said yesterday.

Association of Bureaux de Change Operators of Nigeria (ABCON) President, Dr. Aminu Gwadabe, said aside monetary policy tightening that led to interest rate hike and more investment in government instruments and clearance of $7 billion forex backlog forward commitments, the recall of the BDCs has significantly boost dollar liquidity at the retail end of the forex market.