The Nigerian Online Newspaper

Liquidity boost to BDCs narrows exchange rate gap – Gwadabe

Alhaji Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria, says lower exchange rate gap is due to liquidity boost to the BDCs sector.
Gwadabe told the News Agency of Nigeria on Tuesday in Lagos that the increase in the weekly volume of foreign exchange offered to BDCs had seen the reduction in the exchange rate gap from N418 to N403 to the dollar.
“The review of volumes upward of the proceeds of International Money Transfer Services Operators and the removal of disparity in applicable exchange rates is impacting the rates positively,” Gwadabe said.
The ABCON chief said the naira rebounded to an all time low of N360 from N520 to the dollar at the onset of the CBN’s injection of liquidity to the inter-bank market.
He, however, said it was surprising that the gains of the injection of over $1.5 billion by the Central Bank of Nigeria could not last for more than two weeks in spite of liquidity boost to the banking sector.
“The naira witnessed another somersault to a new high of N420 to the dollar in spite of the liquidity boost to the banking sector,” he said.
Gwadabe said all these were happening at a time when the banks were returning most of their purchases for invisible from the CBN on the premises of poor customer patronage and resistance.
The president of the association said the CBN was left with the only option of using the BDCs to ensure the renewal of confidence in the foreign exchange market.
He said the apex bank’s move was also to check the renewed onslaught by speculators, parallel market operators and currency hoarders.
Gwadabe said the BDCs were collaborating with the CBN and the security agencies to ensure the stability of the naira, adding that the naira might strengthen further during the week.
NAN.