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CBN’s indecision responsible for Naira slide, says ABCON Chief

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This file photo taken on January 28, 2016 shows shows naira banknotes, Nigeria’s currency, in Lagos. AFP PHOTO / PIUS UTOMI EKPEI

A financial expert, Alhaji Aminu Gwadabe, has blamed the Central Bank’s knack for last minute solution for the misfortune of the naira at the foreign exchange market.

Gwadabe, who is also the President, Association of Bureau De Change Operators of Nigeria (ABCON), said recent depreciation of naira could be traced to speculators’ onslaught and resistance by the banking industry.

Speaking during a chat with reporters, the dealer noted that refusal by some banks to sell the invisibles, such as, personal and business travel allowances frustrated naira recovery.

Recalling that the CBN had recently accused banks of frustrating its policies, the ABCON chief said it was ironical that the naira started losing strength in spite of the CBN’s review of the rates from N375 to N360 to a dollar.

“The naira,” he remarked, “started trading on Monday with a promising outlook for sustained strength against the dollar and other currencies, but it began to somersault at the middle of the week; ending deeper northward to close at N394 to a dollar on Friday, translating to 10 per cent depreciation of what was recorded during the week.’’

Gwadabe aded that removal of disparity in applicable exchange rates among the BDCs, Travelex and the banks, should have strengthened the nation’s currency, stressing that the battle for the soul of the naira would be won if the CBN could boost liquidity to the BDCs for effective unification of rates.



3 Comments
  • raff jones

    The BDCs and black market should be scraped entirely. Anyone caught buying or selling forex on the streets should be arrested, the money confiscated and the person jailed. This way, the rates will converge and become uniform. Anything else is just a flash in the pan and not due to any of these nonsense this man is talking about.

    • Comfort Destiny

      If you think that the BDCs and the black market would be scrapped, you better think again, because that would not happen – not in Nigeria! What would the Mallams be doing? Do you want them to starve to death. The president will never heed or assent your suggestion. What a country! The way forward is for the CBN to sanction heavily banks that violate the CBN’s policies on foreign exchange. Talking without any action is meaningless. The CBN must stand firm and exercise its authorities.

  • real

    This man is not a financial expert, he his a black market trader of dollar and forex. The only solution for the central bank, is for the central bank to focus on reducing the core demand for forex, and focus its forex supply on productive sectors. The current policy can’t be sustained a long period of time, and because we don’t have market forces controlling the prices and supply, the central bank would be forces to use our limited forex supply to try to bring prices down.