Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Association of Bureau De Change Operators of Nigeria (ABCON) has called on the Central Bank of Nigeria (CBN) to maintain its current policy of selling dollars to Bureaux De Change (BDCs).

Aminu Gwadabe, ABCON president, told Legit.ng that the CBN's intervention has had a positive impact on the stability and appreciation of the naira in the foreign exchange market in the past weeks.

Gwadabe explained that currently, the naira has maintained its stability and appreciation in the foreign exchange market as we eventually witnessed the ultimate objectives of the convergence of the official market and the open market aka free funds/ parallel markets.

His words:

"Conversely, what we are witnessing now is a situation where the parallel market rate is even trading lower than the interbank proceeds sales to BDCs.

"For instance, yesterday, while the banks are offering a weighted average of N1505/$ the parallel market levels were at #1503/$ which even makes the BDCs constrained to buy from the banks."

Speaking further, he raised concerns that despite the CBN allowing BDCs to operate in the official market, traders are finding it difficult to source forex from banks.

Gwadabe called on the CBN not to stop its regulatory oversight to ensure that its rules are implemented.

He said:

"The naira has achieve stability, It is however not yet an Uhuru without a continuing regulatory oversight on transparency of participants as regards the maximum margin on sales by the banks to the BDCs,

"Also, it is for the CBN to issue a prudential percentage on volumes of sales on Diaspora’s remittance, portfolio investment proceeds by banks to BDCs to continue to usher in supply and thereby discourage the illegal economic behaviour of currency substitution, speculation and discretionary demands that are frivolous.

"Lastly, the CBN should also not abandon the calibration of their intervention sales to the BDCs as the catalytic actor in the foreign exchange market to continue to back the naira strength."

Commenting on broader economic policies, ABCON commended fiscal authorities for their efforts to reduce fiscal deficits, which have historically strained exchange rate dynamics.

ABCON president added:

"Finally, I also commend the fiscal authorities on their efforts to reduce the fiscal deficit that is an albatross on our exchange rate determination.

"I also called on them to maintained the relative downward inflationary trends in the prices of goods and services by a calling all the Governent agencies and state Governments to declare a state of emergency on inflation in order to alleviate the sufferings of many Nigerians."

In a previous report by Legit.ng, it was revealed that the naira depreciated against the US dollar at the official market.

The naira closed negative at N1,502 per dollar from N1,499 it traded the previous day.

The Nigerian currency also depreciated against the dollar in the black forex markets.

Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.

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Source: Legit.ng