Why Naira Is Regaining Strength In FX Market – Gwadabe
The President of the Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe has said that the Naira is regaining strength against the dollar in the forex Market owing to the dollar injection and the mop-up of the Naira through interest rate hikes.
“The development stems from the ‘double-edged sword dollar liquidity injection and the mopping up of the naira through interest rate hikes’, he declared in a statement issued on Sunday.
“It is a good development as it is a greater risk to speculate, hoard and substitute naira for other currencies,” Gwadabe said, stressing that the speculators are usually interested in the elements of sustainability of the feat so far achieved, arguing that it is panic selling as against panic buying.
The expert tasked the management of CBN to continue to make clarifications and implement some of the association’s recommendations in charting a way forward for naira stability in the FX market.
Among the recommendations, he said ” the inclusion of the BDCs in the foreign exchange market in view of their roles in meeting the needs of the critical retail end sector.
“The BDCs are necessary for the demand measures of the apex bank, transaction monitoring mechanism, and clients utilisation with correcting and moderating potentials,”
The ABCON Boss confessed that the country is experiencing increasing reserves due to increased demand for crude oil, its major export commodity.
“This is due largely to the U.S. increasing inventories and the escalation of tension in the Middle East,” he explained.
“As we continue to observe developments, there is the need to exercise caution in attacking the Naira as it all appears that the CBN seems poised to sustain the gains already recorded at the market”.
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