Naira Gains More Ground Against Dollar As CBN Warns Speculators

The Naira has continued to appreciate against the United States dollar in the parallel and official markets, as the Central Bank of Nigeria (CBN) intensifies its efforts to curb currency speculation and hoarding.

The CBN has also warned speculators to be careful, as it has the capacity and the strategy to sustain the naira’s recovery.

Newsflash Nigeria reports that the Naira traded at N950/$ in the parallel market on Friday,up by 15.18 percent from N1,120/$ on Thursday. In the Importers’ and Exporters’ forex window, the dollar was sold for N783.67/$, compared to N807.27/$ on Thursday, as shown on the CBN website.

The Naira’s rebound was attributed to the CBN’s measures of injecting dollar liquidity into the market and mopping up excess naira through interest rate hikes. The CBN has also been clearing the backlog of forex demand in banks, which had put pressure on the naira in the past.

The Association of Bureau de Change Operators of Nigeria (ABCON), in a WhatsApp message to The PUNCH, commended the CBN for its actions and urged its members to support the naira’s stability.

The ABCON President, Aminu Gwadabe, said that the CBN had a double-edged sword to deal with currency speculators and hoarders.

Gwadabe said, “What is happening in the market and the continuous naira rebound are the manifestations 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 (now) a great risk to speculate, hoard and substitute naira for other currencies.”

He added, “As we continue to observe developments, there is the need for caution in attacking the naira, as it all appears that the CBN has got the arsenal and the logic to continue to enshrine the success recorded.”

He also noted that there had been “panic selling as against panic buying” in the market, as speculators tried to cut their losses. He called on the CBN to include the BDCs in the forex market, as they play a vital role in meeting the needs of the retail sector and ensuring transparency and accountability.

He said, “The BDCs are necessary for the demand measures of the apex bank transaction monitoring mechanism, and clients’ utilisation with correcting and moderating potential.”

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