Business
President Of Association Of Bureau De Change Operators Exposes Why Naira Is Gaining Strength
President Of Association Of Bureau De Change Operators Exposes Why Naira Is Gaining Strength
The Association of Bureau De Change Operators of Nigeria, ABCON, has disclosed the reasons behind the Naira’s resurgence in strength against the dollar.
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“The development stems from the ‘double-edged sword dollar liquidity injection and the mopping up of the naira through interest rate hikes,” its president, Aminu Gwadabe, said in a statement on Sunday in Lagos.
“What is happening in the market and the continues naira rebounds is the manifestation of the CBN double-edged sword measures of dollar liquidity injection and naira mopping through the instrumentality of interest rates hikes.
“It is a good development as it is a greater risk to speculate, hoard and substitute naira for other currencies,” Mr Gwadabe said.
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The ABCON leader, however, noted that speculators are primarily concerned with assessing the sustainability of the progress made thus far. He argued that it is more of panic selling rather than panic buying.
Mr. Gwadabe urged the CBN management to persist in providing explanations and adopting some of the association’s suggestions to pave the way for the stability of the naira in the foreign exchange market.
One of the recommendations, he stated, is the involvement of BDCs in the foreign exchange market, recognizing their vital role in serving the requirements of the essential retail sector.
“The BDCs are necessary in the demand measures of the apex bank, transaction monitoring mechanism and clients utilisation with correcting and moderating potentials,” Gwadabe said.
The financial analyst stated that the nation’s rising reserves can be attributed to the heightened demand for crude oil, which is its primary export commodity.
“This is due largely to the U.S. increasing inventories and the escalation of tension in the Middle-East,” he explained.
As we continue to observe developments, there is the need to exercise caution in attacking the Naira as it all appears that the CBN seems poised to sustain the gains already recorded at the market,” Mr Gwadabe added.
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