BDC Operators Tell CBN What to Do For Naira to Continue Gaining Against Dollar

• Bureau de Change Operators said the CBN needs to be strategic in sourcing for foreign exchange
• They want the CBN to maintain the present momentum so that the naira can continue gaining against the dollar
• They said that the settlement of the Forex backlog is a significant move that will boost the market

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

The Association of Bureau de Change Operators of Nigeria (ABCON) has highlighted the need for the Central Bank of Nigeria to undergo a paradigm shift in sourcing foreign exchange for the economy.

The president of ABCON, Aminu Gwadabe, stated this on Sunday, March 24, during an interview with NAN.

He emphasised the significance of maintaining the present momentum to reduce naira volatility and enhance economic growth.

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This occurred as the naira closed last week at N1,431.49 to a dollar on Friday to show a significant improvement in the value of Nigeria's currency based on FMDQ data.

Momentum can be sustained

According to the BDC president in a TheCable report, the present naira to the dollar exchange rate demonstrates the CBN's strength and resources for defending the value of the local currency.

He said:

“In summary, that is my observation: the increasing resilience, capacity and arsenal of the central bank of Nigeria to defend our local currency through several measures.

“My advice is for them to continue widening and undergo a paradigm shift in sourcing foreign exchange for the economy.”

FX backlog

In addition, Gwadabe stressed the significance of clearing a legitimate backlog of foreign exchange to enhance market stability and draw in foreign investment.

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He said that clearing the backlog of legitimate foreign exchange was a positive development for the forex market, as it would improve the naira's outlook and draw in foreign investors.

“We have also seen how they boldly decideded to reinstate the BDCs window to deepen the market, which has broken the camel’s back.”

He claimed that the FX market had benefited from the BDCs' readmission. According to Gwadabe, the CBN's actions have boosted market confidence, as seen by the naira's appreciation versus vital international currencies.

Gwadabe praised the CBN for its ongoing efforts to control inflation and its recent reform to stimulate the economy.

He pointed out that sustainable economic stability depended heavily on the government and the CBN working together effectively.

Special consideration to BDCs

Gwadabe also restated the function of BDCs in reducing market turbulence and underlined the need to view them as essential collaborators in the effective execution of monetary policy.

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Presidency gives real reasons naira exchange rate to dollar is closer to N1,300/$1

As a result, he pleaded with the monetary policy committee to approve the reforms that ABCON had suggested, including giving BDCs special consideration to boost their capability and guarantee that their contribution to market stability is optimised.

Gwadabe anticipated that the MPC would raise interest rates further to combat the ongoing inflation rate ahead of the March 25 and 26 meeting they boldly decided.

Why naira-dollar is closer to N1,300/$1

In an earlier report by Legit.ng, the presidency sad the clampdown on some cryptocurrency trading platforms has helped the naira stabilise in the foreign exchange markets.

Ajuri Ngelale, the special adviser to the president on media and publicity, stated this while speaking to journalists in Abuja on Friday, March 22, 2024, in reaction to the naira exchanging close to N1,300 per dollar.

Source: Legit.ng