The President of the Association of Bureaux de Change Operators of Nigeria, ABCON, Aminu Gwadabe, has announced that the Naira has appreciated by N660 against the US dollar since the Governor of the Central Bank of Nigeria, Olayemi Cardoso, recalled BDC operators into the Foreign Exchange Market.
In a statement to Media Talk Africa over the weekend, Gwadabe highlighted the positive impact of the BDCs’ return to the forex market. He attributed the Naira’s appreciation to various factors, including monetary policy tightening, increased investment in government instruments, clearance of a $7 billion forex backlog, and the boost in dollar liquidity at the retail end of the forex market.
From a low of N1,915 per USD in February, the Naira has strengthened to N1,255 per USD, marking a significant gain of N660. Gwadabe expressed his appreciation to the CBN and other related agencies for recognizing BDCs as a crucial component of the foreign exchange market and an effective mechanism for exchange rate transmission.
The reintroduction of BDCs has not only curbed illegal economic activities like hoarding and round-tripping but has also led to exchange rate convergence. This has resulted in positive impacts on the prices of goods and services, with reductions in international school fees, medical tourism costs, and airfares for local and international trips.
The stability in the exchange rate is also contributing to lower inflation rates and increasing public confidence in the local currency. Gwadabe emphasized that a stable Naira will attract more foreign portfolio investments to the economy, further bolstering forex earnings.
He commended the CBN under Cardoso for its efforts in recognizing the role of BDCs in maintaining stable exchange rates. With foreign portfolio investments on the rise and over $1.5 billion in inflows following a recent interest rate hike by the Monetary Policy Committee, the prospects for forex earnings are promising.
The collaboration between BDCs, CBN, National Security Adviser, EFCC, and support from the Presidency has laid the foundation for these achievements. Gwadabe urged the CBN to continue fostering a strong relationship with BDCs to sustain the success story and ensure market stability.
In conclusion, the positive developments in the foreign exchange market are creating an atmosphere of confidence, hope, and liquidity. The ongoing efforts to maintain a stable Naira are crucial for the economic growth and prosperity of Nigeria.
