How CBN, ABCON partnership is stabilising naira amid election spending
The assessed strategic partnership between the Central Bank of Nigeria (CBN) and the Association of Bureaux De Change Operators of Nigeria (ABCON) has been attributed to the relative stability of the naira at both the official and parallel markets despite campaign spendings by political parties so far.
Part of the partnership deal, which includes the sustenance of dollar supply to over 4,000 Bureau De Change (BDC) operators across the country through the International Money Transfer Operations (IMTOs) forex window has been seen as having helped the local currency sustain its status.
Accordingly, the CBN, spot rate closed last week somewhat flat at N306.75/$1 from N306.70/$1 in the prior week. Similarly, the exchange rate at the Investors & Exporters Forex window closed at N364.70/$1. At the parallel market and BDCs, the naira traded at N363/$1 throughout the week.
ABCON President, Alhaji Aminu Gwadabe, who spoke to financial journalists in Lagos, said the naira has remained stable despite political parties’ campaign spendings across the nation.
“The strategic partnership, actions and pre-actions of CBN and ABCON have stopped distortions to the exchange rate due to ongoing politicking and campaign spendings in the country,” he said.
According to him, the determination of the apex bank to maintain the IMTOs forex window for the over 4,000 BDCs on weekly basis has brought steady liquidity in the market and discouraged unethical market behaviours like hoarding, speculation and frivolous demand.
He however, said that ABCON has ensured that its members continue to make dollar accessible to critical end-users like travelers demanding personal and business travel allowances, school fees and medical bills payment abroad, among others.
Gwadabe noted that the ongoing ABCON automation and configuration of soft token for forex returns rendition by over 4,000 BDCs nationwide will enhance transparency and financial integrity of the operators.
This feat will no doubt strengthen the effectiveness of the technical compliance of the Anti money laundering and counter terrorism financing laws and help Nigeria’s assessment into the Financial Action Task Force coming up next year,” he stated.
He expressed gratitude for the observed increase in surveillance by the security agencies on illicit financial flow and controls at the nations boarders, but also noted that the secondary forex market currently enjoys huge confidence, making it difficult for forex speculators and illegal forex dealers to manipulate activities.