ABCON Reveals CBN's Plan For Black Market Operators as FG Says More Pain Coming For Speculators

• Bureau de Change Operators have warned black market dealers about the dangers of speculation
• ABCON chairman, Aminu Gwadabe, said the CBN is wielding a double-edged sword and against Forex offenders
• He said the apex bank has the logic and the arsenal to tackle Forex volatility in Nigeria

Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.

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.

Read also

Forex speculators, hoarders hit with losses as naira maintains steady gains in black market

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.

Read also

“Petrol to sell for N1,000/litre”: Marketers raise concern over NNPC’s monopoly as Forex scarcity bites

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."

Analysts predict N670 per dollar by December

Read also

“No more December deadline”: CBN gives fresh order on withdrawal of old naira notes

Banker and economist Jonathan Imoh told Legit.ng in an interview that the naira might rally to about N670 per dollar by Christmas as CBN continues to plug the holes in the Forex market.

He stated that from what is happening, the CBN is poised to reverse the trend of the tumbling currency.

"What we see now is that CBN has finally got it right instead of the previous experimental approach. The current intervention is curbing hoarding. As the ABCON Chairman said, it is hazardous to hoard Forex or even speculate."

He stated that what remains now is for the apex bank to attack inflation and reduce prices.

"What CBN is doing in the Forex market won't make any impact if inflation remains high. Tackling Forex backlogs is one leg of a three-legged stool," Imoh revealed.

“We’re Ready:” ABCON Sends an important message to CBN on dorm account regulations

Legit.ng earlier reported that the President of ABCON, Gwadabe, asked the Central Bank of Nigeria (CBN) to review the laws on domiciliary accounts to stop Forex hoarding.

Read also

N700/$: Hope rises for Naira to bounce back against dollar as CBN intensifies solution, gets support

TheCable reports that the ABCON Chairman stated this on Tuesday, October 31, 2023, as he commented on the recommendations of the Presidential Committee on Fiscal Policy and Tax Reforms.

The Committee, led by renowned tax policy expert Taiwo Oyedele, proposed 20 policy recommendations to improve the Forex market and end volatility in the system.

Source: Legit.ng