The President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, has reacted to the shed in the country’s external reserves.
Gwadabe said the increasing demand of oil marketers, investors backlog, school fees, and travellers have continued to mount demand pressure on the limited dollar availability in the market.
His reaction follows a loss of $167.2 million in Nigeria’s external reserves only in July.
Naija News gathered that in the past two weeks, the naira fell from 820/$ to 868/$ at the parallel market on Monday.
Figures obtained from the Central Bank of Nigeria (CBN) on the movement of external reserves revealed that the reserve, which ended June 30, 2023, at $34.12 billion, fell to $33.95 million as of July 28, 2023, meaning a difference of $167.2 million fall was recorded.
Speaking to The Punch about the forex pressure, Gwadabe said, “Optimism is giving way to pessimism with a continuing lack of confidence in our local currency. This has led to an increase in Fx’s holding position, hoarding, and speculation.
“The core objective of the harmonization of the multiple exchange rate is to discourage arbitrage and rent-seeking; however, the recent trajectory does not seem to achieve that.
“The increasing demand of oil marketers, investors backlog, school fees, and travellers have continued to mount demand pressure on the limited dollar availability in the market.”
He noted that to arrest the looming situation of the local currency, “We need to ensure additional foreign finance either bilaterally or multilaterally to enhance liquidity.”
Another Bureau de Change Operator in Lagos, Mr. Abudul Ahmed, told the platform “We bought and sold the dollar today (Monday) at 860/$ and 868/$.”
Recall that The acting Governor of the Central Bank of Nigeria, Folashodun Shonubi, at the last Monetary Policy Committee meeting in Abuja pledged that the apex bank would tackle demand pressure on the country’s exchange rate.
He stated that “The accretion to external reserves remained weak while foreign exchange demand pressures persisted.
“The market needs to find its level. There is pent-up demand which the market cannot cater to. Once we clear this demand, the volatility will normalise. We have started intervening, and we will continue to intervene until the market gets to our level.”