The Association of Bureaux Des Change Operators of Nigeria (ABCON), has advised the Central Bank of Nigeria (CBN) to abolish its official exchange rates even though it is cheaper when compared to Black Market rates. This, it argued would give the local currency strength against the dollar.
Alhaji Aminu Gwadabe, the President of ABCON, who made this known, maintained that if the central bank is serious about addressing the consistent depreciation of the naira against the dollar, it needs to do all it takes within its power to sustainably inject dollar into the market.
“It might sound counterintuitive but the way out of the current frenzy is to abolish the official fixed exchange rate and allow the Naira to float. CBN should contemporaneously undertake a large-scale dollar intervention in the open market that can inspire confidence in the Naira and checkmate the current tailspin.
“Once there is a significant positive movement, the market will react and, in all probability, spur an avalanche of panic selling and further buoy the Naira,” Gwadabe said as he argued that the loss in the value of the local currency is reversible.
CBN’s defense of the naira fall
As the local currency recently exchanged for N710 against the dollar in the open market, the financial industry regulator blamed the Nigerian National Petroleum Company Limited (NNPC) for failing to remit the foreign currency into Nigeria’s foreign reserves.
According to CBN, the identified failure resorted in an acute shortage of dollars, such that the foreign exchange (FX) market is suffering from it.
In a statement titled “The forex question in Nigeria: Fact sheet”, the CBN also cited the two recessions driven by a global economic slowdown and the COVID-19 pandemic in the last six years, which it explained have affected the country’s sources of foreign currencies; oil exports, non-oil exports; diaspora remittances, as well as the Foreign Direct/Portfolio Investments inflow recorded by the country.
Meanwhile, operatives of the Economic and Financial Crimes Commission (EFCC) raided BDC operators at Wuse Zone 4, a popular neighbourhood for bureau de change in Abuja.
The anti-graft agency carried out the raid as the apex bank also heaped the blame for the naira fall on currency speculators.
