CBN’s double-edged approach responsible for Naira rebound—ABCON

The Association of Bureau de Change Operators of Nigeria (ABCON), says the continuous naira rebound are the manifestations of the CBN double-edged sword measures of dollar liquidity injection and naira mopping through the instrumentality of interest rates hikes.

The value of the naira increased significantly over the weekend on the black market due to the high possibility of more foreign exchange inflows in Africa’s largest economy.

The optimistic emotions sparked by FG’s promises to support dollar liquidity in the foreign exchange (FX) market arbitrarily strengthened the local currency.

This positive sentiment led to street traders purchasing dollars at a rate of N901 over the weekend, as opposed to N1,050 on Friday of last week.

Also at the official window, the dollar was sold for 783.67 compared to 807.27 per dollar previously.

The President of ABCON, Aminu Gwadebe in a statement warned speculators to be wary, noting that the Central Bank of Nigeria was set to inflict pain on currency speculators.

Gwadabe said: “It is a good development as it is (now) a great risk to speculate, hoard and substitute naira for other currencies.”

The naira regained its strength after the Central Bank of Nigeria started clearing the forex demand backlog in banks.

“As we continue to observe developments, there is the need for caution in attacking the naira, as it all appears that the CBN has got the arsenal and the logic to continue to enshrine the success recorded,” ABCON noted, adding that there had been “Panic selling as against panic buying.”

ABCON, however, tasked the CBN to continue to make clarifications and implement some of their recommendations to include them in the foreign exchange market.