ABCON warns Forex speculators to end illegal activities

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Aminu Gwadabe
Aminu Gwadabe

THE Association of Bureaux De Change Operators of Nigeria, ABCON, has warned its members and forex speculators putting pressure on the naira exchange rate to stop such activities or risk losing their money. Aminu Gwadabe, President, ABCON, said the Central Bank of Nigeria, CBN-licenced Bureaux De Change, BDCs, would soon start full operations as the apex bank would soon reopen the dollar sales to the operators.

Gwadabe, who made this known on Wednesday, May 20, in Lagos, said with the CBN’s planned lifting of a moratorium on dollar sales to BDCs, reopening of the airports for air travels,  global ease on the restriction of movement are positive indications that dollar flows to the economy would soon improve. He said the naira was yesterday evening exchanging at N461 to the dollar at the parallel market but would be upbeat once dollar sales to BDCs commence.

“The return of over 5,000 BDCs to the forex market will add great strength to the Naira and lead to major capital losses for forex speculators. It happened in 2016 and will happen again in 2020. The return of the BDCs will immediately boost Naira recovery and put the enemies of the economy to shame. We are committed to the CBN’s exchange rate stability and will take all necessary steps within set rules and regulations to keep the naira stable,” he said.

Gwadabe said the return of BDCs to the forex market would help chase away speculators, curb rising inflation, boost productivity and employment, enhance price discovery, enhance market transparency and competitiveness. He said the uptick in activities in the Chinese economy had raised the country’s crude oil demand which would impact positively on Nigeria’s crude oil sales to the Asian country and boost dollar earnings.

According to him, the CBN has created enhanced fiscal buffers with the $3.4 billion International Monetary Fund, IMF, loan under the Rapid Financing Instrument, RFI, meant for Nigeria to meet its urgent balance of payment stemming from the outbreak of the COVID-19 pandemic.

He said the loan, which has been disbursed, would also boost Nigeria’s dollar reserves and financing to the budget for targeted and temporary spending increases. The loan, he added, would help in containing and mitigating the economic impact of the COVID-19 pandemic and of the sharp fall in international oil prices thereby putting the Naira in a better standing against other currencies.

The ABCON boss said Nigeria’s foreign reserves have reached over $35 billion, which represents enough buffers for the CBN  to deal with any act of illegal economic behaviour like hoarding, speculation, conversion of local assets among other illicit financial activities, Gwadabe added.

He said the CBN has also officially reviewed  the naira exchange rate to N380 to a dollar.  Aside devaluing the naira, the apex bank also adopted a unified exchange rate, and pushed the official rate of the naira to N376 to dollar for International Money Transfer Operators rate to banks; N377 to dollar for banks’ dollar sale to CBN and pegged CBN’s dollar sales to banks at N378, all aimed at attracting Foreign Portfolio Investment and strengthening the local currency.  The BDC operators are expected to buy dollar from the CBN at N378 per dollar.

– May 22, 2020 @ 15:13 GMT |

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