As the foreign exchange market remains unstable with the naira depreciating against major foreign currencies, the Association of Bureau de Change Operators of Nigeria (ABCON) has called on the Central Bank of Nigeria (CBN) to allow its members play more role in the market. Some BDC operators, who spoke to New Telegraph in Abuja, said the naira could tumble further against the dollar in the days ahead unless the CBN doubles its intervention.
An operator, Ibrahim Dauda, who confirmed Wednesday’s prevailing exchange rate, told this reporter that while he bought at N 1,105 to $l, he sold for N1,115 to $1. Another parallel market operator, who identified himself as Aminu, offered the same price. Aminu said more Nigerians with greenback in their possession trooped to offload their dollars weeks ago when the naria exchange rate to the dollar crossed N1000.
Experts and analysts had advised the government to take drastic and appropriate actions to halt naira’s decline against the dollar. Speaking with New Telegraph, the President, ABCON, Alhaji Aminu Gwadabe, tasked the government to start, without further delay, dialogue with relevant stakeholders and institutions of retail forex trading to show concern on naira volatility doldrums.
The ABCON President said naira volatility underscored current slow pace of economic development. He said: “The volatility of our local currency underpinned the slow economic growth of our nation. This is a result of a combination of several factors. First is the increasing shortfall of our foreign earnings in almost all sources.
“Secondly, is the market uncertainty and loss of confidence that fuels demand from the public to edge their investment in naira for currency substitution. Thirdly, we are a consuming nation that doesn’t print currency of our import which is the greenback that has to be earned. Fourthly, our non- oil export earnings to our GDP is less than two percent and it increases our balance of payments vulnerability.” To address the current forex quagmire, Gwadabe advised the government to make BDCs agents of IMTSOS.
He advised CBN to grant BDCs autonomy to import green back and be allowed to play on the digital payments’ platforms. Speaking with this medium on how to rescue naira from its persistent slide, wealth creation and financial adviser, Mr. Gabrel Idakolo, urged CBN to intervene strongly on the forex trading market and be faithful in fulfilling forex obligations it entered with her partners.
“The Federal Government through the CBN needs to intervene strongly to halt the current decline of the value of the naira by clearing all outstanding FX obligations due to foreign air- lines and others. “The government also needs to fast track its arrangements with Afreximbank as regards the $3 billion crude swap to provide cushion for the economy and reduce the scarcity of the US dollar, which is the major factor to the continuous rise in the rate of US dollar to the naira,” Idakolo suggested.
Experts’ suggestions are coming on the heels of financial market operators’ expectation of new forex policy direction by the new CBN Governor, Mr. Dr. Olayemi Michael Cardoso. The new CBN boss, who was cleared by the Senate arm of the National Assembly a few weeks ago, had assured investors of the bank readiness to address current liquidity challenge in the country.
While pledging a conducive atmosphere for unhindered investment, Cardoso said his team had a short-term goal of addressing structural issues within the financial system that gave rise to the liquidity challenge in the first instance. He gave the assurance recently when a group of investors paid him a courtesy visit. He said the new management team at the bank would do its best to tackle the impediments in the foreign exchange market in Nigeria.
Cardoso said the bank would do all within its statutory functions to address identified distortions and ensure a conducive atmosphere for different categories of investors. Disclosing plans to formally unveil his agenda for the monetary and financial sector in the days ahead, the CBN governor harped on the importance of credibility and transparency in implementing the bank’s monetary policy.
To achieve this, he said the bank would focus on strengthening its data-gathering system to ensure that only verifiable data will be relied upon for evidence-based decisions. According to him, the CBN would also adhere to rules that are known, acceptable and transparent for the conduct of monetary policy.
