The introduction of several forex management measures side-by-side with complementary interventions in food production and manufacturing have drastically reduced food importation, which hitherto constituted a large chunk of the pressure on the Foreign exchange (forex) market.
The outbreak of the Coronavirus, the declining oil price in the global market, has caused a decline in the nation’s reserve by N10 billion creating room for panic buying and currency speculations which has resulted to a drastic rise in the exchange rate.
The Central Bank of Nigeria (CBN) has indicated that it was alive to the responsibility of rescuing the Nigerian economy from the fallouts of the Coronavirus (COVID-19) induced global economic stress and stabilise the forex with some concrete steps it has taken to tackle some downside market developments.
Unfortunately, activities of speculators in the forex market have continued to trigger panic and pose a threat to efforts by the apex market regulator to stabilise the market.
There is no gainsaying the fact that naira is currently facing its greatest risk from the negative impact of COVID-19 pandemic, as currency speculators continue to make spurious demand for dollar with hope to make good returns from the rising gaps between official and parallel market rates
But as the CBN and Association of Bureaux De Change Operators of Nigeria (ABCON) finalise plans to resume dollar sales to Bureaux De Change (BDCs), foreign currency speculators will in the coming months face over N10 billion losses as the
Indeed, with over 5,000 BDCs spread across the country receiving weekly allocations for sale to the retail end of the market, and rising accretion to the foreign reserves to over $37 billion, the naira’s future looks bright.
Moreso, ABCON has continually warned forex speculators to retreat your steps or get ready to lose their life savings and businesses as the CBN has the financial muscles to sustain dollar interventions to businesses and economy to keep the naira stable in line with its exchange rate stability mandate.
The CBN’s Governor, Godwin Emefiele and President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe have in recent times, analysed the illicit business of currency speculations and its threats to the economy and naira stability.
Both leaders have also warned the currency speculators on the looming danger for their trade if they refuse to retrace their steps as they will incur losses estimated at over N10 billion in the next few months as the CBN prepares for BDCs return to the forex market after nearly six weeks of absence due to the Coronavirus pandemic and need to protect operators.
The fact remains that currency speculators will lose huge funds, that will likely be the beginning of the ending for their illicit businesses as the apex bank will soon begin dollar sales to over 5,000 BDCs operating across major cities nationwide.
Emefiele even went a step further appealing to industrialists patronising the parallel market to desist from such practices in the interest of the economy and for the sustainability of their businesses, failure which they will equally record same huge losses like the currency speculators.
Both Emefiele and Gwadabe have huge experiences in the market to predict what follows after every major crisis.
Like in 2016 currency crisis, the market got a major relief after the BDCs’ began getting dollar allocations from the CBN. That same scenario will soon play out as the CBN team and ABCON Management begins to count days for the BDCs return to the market.
He said the CBN has come to realize that BDC operators can be the difference between naira recovery and depreciation during volatile and uncertain times. That’s especially true now that the local currency has come under intense pressure that is purely driven by speculative demand for the dollar. Emefiele has warned domestic and foreign investors against patronising the unofficial market, saying it was helping to overheat that market.- culled from The Guardian
