The Association of Bureau De Change Operators of Nigeria (ABCON), has stated that bthe recent FGN securities’ oversubscription is helping the naira’s exchange rate against the US dollar.
In an interview with NAN, the group’s president, Alhaji Aminu Gwadabe, revealed this and praised the CBN’s recent changes, which are intended to control inflation and strengthen the naira
The head of ABCON stated that the forex market was positively affected by clearing the backlog of valid foreign exchange transactions, which enhanced the Naira’s prospects and attracted international investors.
He stated, “We are also seeing how they are using the securities to attract foreign investments, which are oversubscribed. That is also having a lot of positive impact on the exchange rate.”
Read Also: Why Naira Regained Strength At FX Market- ABCON
“We have also seen how they took the bold decision to reinstate the BDCs window to deepen the market, which has broken the camel’s back,”
“As we speak, as of today before the meeting, the exchange rate of the Naira to the United States dollar is awesome. It’s reassuring and shows that the CBN has the muscles and arsenal to protect the value of the Naira.”
“In summary, that is my observation: the increasing resilience, capacity, and arsenal of the Central Bank of Nigeria to defend our local currency through several measures.”
“My advice is for them to continue widening and undergo a paradigm shift in sourcing foreign exchange for the economy,”
Read Also: BDCs Don’t Need More Than N35 Million Capital-ABCON
Over the last month, there has been a notable increase in the demand for Nigerian Government Treasury bills and the Central Bank of Nigeria’s (CBN) Open Market Operation (OMO) bills, drawing particular interest from international investors. This surge in demand is largely due to the high interest rates these securities are yielding.
At a recent auction, the CBN sold OMO bills worth N1.06 trillion, with the interest rate peaking at an unprecedented 21.5%, and received bids totalling about N1.14 trillion. Similarly, in a Treasury bills auction held in March 2024, the CBN sold N1.3 trillion worth of T-bills at the same interest rate of 21.5%, experiencing significant oversubscription.
The Naira has experienced considerable appreciation against the US dollar in the last two weeks, underscoring the CBN’s successful measures to stabilize the fluctuating foreign exchange market.
