Why naira regains strength at FX market – ABCON

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Lagos, Nov. 6, 2023 – The Association of Bureau De Change Operators of Nigeria (ABCON) has attributed the recent steady appreciation of the naira against the dollar to the injection of dollars into the market and the mopping up of naira through interest rate hikes. 

Alhaji Aminu Gwadabe, the President of ABCON, disclosed this in a statement in Lagos on Sunday.

“What is happening in the market and the continues naira rebounds is the manifestation of the CBN double-edged sword measures of dollar liquidity injection and naira mopping through the instrumentality of interest rates hikes.

“It is a good development as it is a greater risk to speculate, hoard and substitute naira for other currencies,” Gwadabe said.

The ABCON boss, however, said that the speculators are usually interested on the elements of sustainability of the feat so far achieved, arguing that it is panic selling as against panic buying.

Gwadabe urged the management of apex bank to continue to make clarifications and implement some of the association’s recommendations in charting a way forward for naira stability at the foreign exchange market.

He listed some of the recommendations as the inclusion of the BDCs in the foreign exchange market to facilitate their roles in meeting the needs of the critical retail end sector.

“The BDCs are necessary in the demand measures of the apex bank, transaction monitoring mechanism and client’s utilisation with correcting and moderating potentials,” Gwadabe said.

The financial expert said that the country was experiencing increasing reserves due to increase demand of our major export commodity which is the crude oil.

“This is due largely to the US increasing inventories and the escalation of tension in the middle east.”

As we continue to observe developments, there is the need to exercise caution in attacking naira as it all appears that the CBN seem poised to sustain the gains already recorded at the market,” Gwadabe said.   (GBN)

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