The Nigerian currency – Naira – on Thursday staged a major recovery at the parallel market as it appreciated to a band of N225 to N230 to a dollar, compared to N240 to the dollar at which it sold in the last few weeks.
According to forex dealers, the naira’s gain was due to surplus supply of the greenback in the market, even as it looked like a lot of speculators would lose their shirts.
Information gathered says commercial banks that presently have dollars in excess of $1 billion in their vaults have started taking desperate measures to mitigate currency risk.
According to a bureau de change (BDC) operator, banks have stopped accepting dollars because they have too much cash in their vaults.
“The reason the banks have too much cash is due to speculation and money laundering. A lot of people have been speculating against the naira and amassed so much cash. Then there are those who have been amassing dollars obtained illicitly and want to launder the money.
“So bank vaults are awash with dollars, largely driven by speculation and money laundering. The banks made it very clear that they want to get rid of the dollars in the system, so if you want to withdraw you can, but you cannot pay in dollars into your domiciliary account,” the source stated.
As a result of the development, banks have been rejecting dollar deposits into domiciliary accounts, but customers are allowed to withdraw cash from their accounts.
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