ABCON reveals CBN's plan for black operators as FG says more pain coming for speculators

The Association of Bureau de Change Operators of Nigeria (ABCON) has said that the Central Bank of Nigeria is set to inflict pain on black market operators through its interventions.

It cautioned dealers and speculators to be careful as the naira rallies against the US dollar and major currencies.

ABCON says it is too risky to speculate on Forex Punch reports that ABCON President Aminu Gbadabe said the apex bank is wielding a double-edged sword against currency speculators in Nigeria.

He said what is happening presently is that the CBN is mopping the naira via interest rate hikes and other forex interventions. He stated that it is too risky to speculate based on the current trajectory of the naira.

The naira rallied by over 20% to trade N950 per dollar in the parallel market on Friday, November 3, 2023, from the N1,120 it sold the previous day.

Naira recovers by 20% in one week

At the Importers and Exporter (I&E) window, the naira sold for N783.67 per dollar compared to the N807 per dollar on Thursday, November 2, 2023. The naira reversed its depreciating trend witnessed earlier this year after the apex bank began to clear the Forex demand backlog in banks.

The naira rallied as CBN reportedly pumped about $6.7 billion into banks as Forex forward payments following the pile-up of backlogs that have plagued the naira.

The move was responsible for the naira's recovery in the past seven days. The ABCON boss said there is a need for caution in attacking the naira as it is evident that the CBN has the Forex and the logic to tackle the FX volatility. ABCON called on the CBN to continue to clarify and implement some of their recommendations and also include them in the Forex market.

ABCON seeks inclusion in CBN policies

He stated that such inclusion would enable BDC operators to play their part in meeting the needs of the retail end of the forex market.

Gwadabe said: "As they pose as pass-through effects of the central bank foreign exchange rate policy of stability and elimination of disparities in the overall market."

"The BDCs are necessary for the demand measures of the apex bank's transaction monitoring mechanism and clients' utilization with correcting and moderating potential."