The Association of Bureau De Change Operators of Nigeria (ABCON) has shed light on reasons Naira is regaining strength against the dollar.
According to Alhaji Aminu Gwadabe, the President of ABCON, this positive development can be attributed to the simultaneous injection of dollars into the market and the removal of Naira through interest rate hikes.
He said :“The development stems from the ‘double-edged sword dollar liquidity injection and the mopping up of the naira through interest rate hikes,” its President, Alhaji Aminu Gwadabe, said in a statement on Sunday in Lagos. “What is happening in the market and the continued naira rebounds is the manifestation of the CBN double-edged sword measures of dollar liquidity injection and naira mopping through the instrumentality of interest rates hikes. “It is a good development as it is a greater risk to speculate, hoard and substitute naira for other currencies,” Gwadabe said.
The ABCON boss, however, said that the speculators are usually interested on the elements of sustainability of the feat so far achieved, arguing that it is panic selling as against panic buying.Gwadabe urged the management of CBN to continue to make clarifications and implement some of the association’s recommendations in charting a way forward for naira stability at the FX market. Among the recommendations, he said, is the inclusion of the BDCs in the foreign exchange market in view of their roles in meeting the needs of the critical retail end sector. “The BDCs are necessary in the demand measures of the apex bank, transaction monitoring mechanism and clients utilisation with correcting and moderating potentials,” Gwadabe said. The financial expert said that the country is experiencing increasing reserves due to increased demand for crude oil, its major export commodity. “This is due largely to the U.S. increasing inventories and the escalation of tension in the Middle-East,” he explained”
As the situation continues to unfold, Gwadabe emphasized the importance of prudence and restraint in assessing the Naira’s performance. It appears that the CBN is committed to maintaining the progress achieved in the market, and it is crucial to support these efforts for sustained stability in the Naira’s exchange rate.
