THE bureau de change operators (BDCs), said the rebound and stability of the naira against the dollar during the week can be sustained by injecting liquidity into the retail end of the foreign exchange(FX) market.
The president of the Association of Bureaux de Change Operators of Nigeria (ABCON), Aminu Gwadabe, told The ICIR on Sunday, November 5, that the government needs to sustain the dollar inflow to the market, to cut off speculators influence in the market.
The Central Bank of Nigeria (CBN), has, during the week, began to clear the $7 billion estimated backlog of foreign exchange forward contracts – a move that is expected to bring relief to the naira, the business community and the economy at large.
The ICIR findings have shown that the naira continued its appreciation streak against the dollar, strengthening to N980/$ in the parallel market on Friday, November 3.
Gwadabe, who lauded the appreciation of the naira against the dollar, said, “it is important to inject liquidity into the critical retail end of the market where the spikes is more pervasive by leveraging on the BDCs pass-through effect of the exchange rate policy of the monetary authorities.
He stressed the need for continuous fiscal discipline by government officials to ensure transparency in governance as naira is weakened not by the demand for dollars but by the pressure of unearned income-grafted funds pursuing dollars.
He suggested further the need to ensure that demand measures to supply measures and legislation of local foreign currency instruments are prioritised to discourage the illegal behaviours of hoarding, speculation and currency substitution in the market.
“Diaspora remittances should be democratized and centralized for the licensed bureaux de change in the digitisation reforms of the apex bank to usher in price discovery, efficiency and transparency,” he said.
He said the naira rebound is the manifestation of measures of dollar liquidity injection and naira mopping through the instrumentality of interest rate hikes.
“It is a good development as it is a great risk to speculate, hoard and substitute naira for other currencies,” he said.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.