The President of Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, has noted the liquidity impact of the intervention of Central Bank of Nigeria (CBN) in closing the exchange rates gap.
Gwadabe said in Lagos that the increase in the weekly volume of foreign exchange offered to BDCs had seen the reduction in the exchange rate gap from N418 to N403 to the dollar.
“The review of volumes upward of the proceeds of International Money Transfer Services Operators (IMTSOs) and the removal of disparity in applicable exchange rates is impacting the rates positively,” Gwadabe said.
The ABCON chief said that the naira rebounded to an all time low of N360 from N520 to the dollar at the onset of the CBN’s injection of liquidity to the inter-bank market.
He, however, said that it was surprising that the gains of the injection of over 1.5 billion dollars by the CBN could not last for more than two weeks in spite of liquidity boost to the banking sector.
“The naira witnessed another somersault to a new high of N420 to the dollar in spite of the liquidity boost to the banking sector,” he said.
Gwadabe said that all these were happening at a time when the banks were returning most of their purchases for invisible from the CBN on the premises of poor customer patronage and resistance.
The president of the association said that the CBN was left with the only option of using the BDCs to ensure the renewal of confidence in the foreign exchange market.
He said that the apex bank’s move was also to check the renewed onslaught by speculators, parallel market operators and currency hoarders.
Gwadabe said the BDCs were collaborating with the CBN and the security agencies to ensure the stability of the naira, adding that the naira might strengthen further during the week.