The Association of Bureau De Change Operators of Nigeria (ABCON) has provided insights into the recent firming of the Naira against the Dollar, attributing it to the Central Bank of Nigeria’s (CBN) strategic actions.
ABCON’s President, Mr. Aminu Gwadabe, explained that the Naira’s resilience against the Dollar can be linked to the CBN’s “double-edged sword measures of dollar liquidity injection and Naira mopping through the instrumentality of interest rate hikes.” These measures have led to a stable Naira exchange rate, discouraging speculative activities, hoarding, and the substitution of Naira for other currencies.
Mr. Gwadabe emphasized that speculators are concerned about the sustainability of this positive trend and suggested that the recent market behavior has been more of panic selling than panic buying.
Naira to dollar gains massively at forex market
He called on the CBN to continue clarifying its policies and consider implementing some of ABCON’s recommendations to maintain Naira stability in the foreign exchange market. One key recommendation is the inclusion of Bureau De Change operators in the foreign exchange market due to their significant role in serving the needs of the critical retail sector.
ABCON’s President also noted that Nigeria’s increasing foreign reserves are a result of growing demand for its major export commodity, crude oil, driven by factors such as rising U.S. inventories and escalating tensions in the Middle East.
In conclusion, Mr. Gwadabe advised caution in assessing the Naira’s stability, as the CBN appears determined to sustain the gains achieved in the foreign exchange market.
The Naira’s recent strength is seen as a positive development, and ABCON’s insights shed light on the factors contributing to this stability in the Nigerian currency.
