Forex speculators, hoarders to lose N700m this week – Gwadabe

As the Central Bank of Nigeria (CBN) intensifies effort in ensuring convergence of rates at the foreign exchange markets, President of the Association of Bureau de Change Operators of Nigeria (ABCON) Alhaji Aminu Gwadabe, has said that this week is going to bring doom to speculators and hoarders as they may be losing over N700 million.

The BDCs boss disclosed that the increasing clearance of more of its members and the sustained intervention of the CB is positively impacting the rates as dollars continues to grow day by day.

In an exclusive chat with Business Times, Gwadabe noted that the speculators and hoarder are going to record huge loses this week.

According to him, “this development is largely accountable as a result of the sustained intervention in the interbank market and granting of more access to BDCs at the Money Transfers Operators (IMTSO) window by the CBN.

The naira have gained strength from 455 to a dollar to 435per the US currency on the first trading day of the week and strengthened further to close at 430.

In view of this continuous appreciable growth of the local currency at the parallel market, the ABCON president has said, “the week ahead is going to be a doom week for speculators and hoarders.

“My expectation if both volumes and applicable exchange rates are the market which hitherto has being one of the major reasons for the naira weakness. If both volumes and applicable exchange rates are review for the BDCs subsector, the naira should be trading at N415 to the dollar”, he explained.

Meanwhile, Gwadabe had earlier told pour correspondent that ABCON is always in support of the efforts of the CBN in exchange rate convergence. However, the effectiveness of any strategy will depend largely on carrying all the stakeholders along. In business there is only a deal when all parties are happy.

He noted that operators are not doing enough in supporting the apex on its foreign exchange motive to achieve convergence in the market.

Gwadabe, however, lauded the CBN for increasing the number of BDCs participation in the international money transfer to 3,124 this week from approved 3,114 BDCs last week.

It is worthy of notes that CBN has weakened the naira by 0.6 percent in the last two weeks through dollar interventions on the official market aimed at narrowing the spread with the black market, traders said on Tuesday.

The naira was trading at 307.50 on the interbank market on Tuesday, almost 30 percent weaker than on the unapproved retail market where it was quoted at 435 per dollar.

The central bank had been selling dollars at 305 levels since August to support the Nigerian currency. However it devalued the naira last month for individuals, paving the way for a possible broader move to narrow black market rates.