Naira Rebounds, Exchanges For 420/$, Speculators Count Losses
ABCON Says N386/$ New Exchange Rate Not Sustainable.
The Naira exchanged to the dollar at the parallel market at N420/$ on Wednesday, following the interventions made by the Central Bank of Nigeria in the Investors and Exporters window.
Prior to CBN’s renewed intervention in the I&E window on Monday, the Naira exchanged for as high as N480 to the dollar. Speculators in Nigeria’s foreign exchange market would count huge losses as the naira continued to surge against the dollar, experts have said.
The CBN had said that it would also resume the sale of foreign exchange to operators of Bureau de Change from September 7. Speaking on the issue in a statement entitled, “Forex: Speculators set to count losses,” the Director, Corporate Communications Department at the CBN, Isaac Okorafor, said the bank had concluded plans to inject liquidity into the foreign exchange market by selling forex to licensed BDC operators.
He said the sale to BDCs would be gradual and be done twice a week, Mondays and Wednesdays, and that the BDCs had been directed to ensure that their accounts with their banks were adequately funded to ensure seamless transactions.
While warning speculators to desist from what he termed unpatriotic tendencies, Okorafor urged registered BDCs to comply with the CBN guidelines as the bank would not hesitate in sanctioning any erring dealer.
Meanwhile the President, Association of Bureaux de Change Operators of Nigeria, Alhaji Aminu Gwadabe, has said that the new exchange rate for the operators to sell forex at N386 cannot sustain their operations.
He also said that funding of transactions for disbursement would commence in four zones of the country, starting from September 4.
Gwadabe spoke on Wednesday at a webinar with the topic, “Resumption of foreign currency sales to BDCs, COVID-19, challenges, compliance and way forward,” which was organised after the CBN announced it would resume forex sales to the BDCs.
He noted that the CBN was set to sell dollars to the BDCs at a fixed rate of N384 to the dollar and they were expected to sell to their customers at N386 to the dollar.
According to him, the BDC operators had said the profit margin was too small and would not be enough to cover their operating expenses.
He said, “The challenge that we are facing is the smaller margin.
“Right now, the parallel market is doing about N430 and our pegged rate is N386 to the dollar.
“So, we still see a gap between the advised exchange rate of N386 by the CBN and what is obtainable presently in the market.” (Punch)
