Currency Traders Warn CBN Naira Could Hit N800/$1 as Nigerians Now Prefer to Save in Dollars
- Bureaux de Change Operators of Nigeria has expressed worries about the devaluation of the Naira in both the official and unofficial market
- The association is concerned that speculation is driving the rate up high in the unofficial market amid dollar scarcity
- Nigeria will hold its general election to pick a new president in eight months' time, and this could further affect naira
PAY ATTENTION: Click “See First” under the “Following” tab to see Legit.ng News on your Facebook News Feed!
Alhaji Aminu Gwadabe, President of the Association of Bureaux de Change Operators of Nigeria, has hinted that many Nigerians are saving in dollars because they worry the naira could tumble to N800 per dollar.
According to him, people are starting to lose faith in the naira's worth due to devaluation, and no one wants to save in naira.
In an interview with the Punch, Gwadabe urged the Central Bank of Nigeria to rethink its decision to bar Bureaux de Change Operators from receiving foreign exchange.
Source: Getty Images
Gwadabe also urged the CBN to establish BDCs’ autonomous foreign exchange trading window (BAFEX) with a determined maximum daily limit.
PAY ATTENTION: Share your outstanding story with our editors! Please reach us through info@corp.legit.ng!
The CBN had in July 2021 officially called off the processing of applications for BDC licenses and sale of forex, saying bureaux de change had become a conduit for illicit forex flows and graft, Dailytrust reports.
But Gwadabe noted that the creation of the BAFEX window is one of the strategies that the association came up with to save the naira from further decline and enhance exchange rate stability.
His words:
"There is no patriotism in capitalism. You cannot tell me to sell my money at N416 when somebody will buy from me at N600, even if you put a fence. So, this is the thing.
"The economy is suffering. People are hoarding. Confidence is being lost. People are losing confidence on the value of the naira because of depreciation, nobody wants to keep naira. Before you know it, inflation is about 16.5 per cent and the naira is losing value.
"So, the best thing any rational human being will do is to do currency subscription. We are seeing speculation; we are seeing hoarding. You don’t need money now, but you are scared that if you don’t buy now, in the next six months, it may be N800. So, this is the issue."
The exchange rate gap widens
Meanwhile, the exchange rate gap between the official and unofficial market widen on Wednesday to over N180.
Data from FMDQ securities shows Naira closed at the official market on Tuesday at N419 compared to N618 it traded at the Peer-2-Peer (P2P) unofficial market.
External reserves drop by $190 million in eight days as CBN launches Forex initiative
Legit.ng has reported that Nigeria’s external reserves have fallen slightly by $196 in eight days by April 28, data obtained from the Central Bank of Nigeria says.
CBN stated that the reserves, which gained $243.83 million within 19 days from $39,54 billion on April 1, 2022, increased to $39.78 billion as of April 19 days from $39.78 billion on April 19, 2022, nosedived.
It fell by $313 million in March after beginning the month at $39.86 billion before falling again to $39.55 billion on March 30.
Source: Legit.ng
