The Association of Bureau De Change Operators of Nigeria (ABCON) has observed a faster-than-anticipated appreciation of the Nigerian Naira against the US Dollar.
President of ABCON, Aminu Gwadabe, disclosed this during a virtual appearance on Channels Television’s ‘Business Incorporated’ programme on Tuesday.
Naira Surges Against Dollar, Hits 5-month High
According to Gwadabe, as of Tuesday afternoon, Bureau De Change (BDC) operators were purchasing the US Dollar at N980 and selling at N1,020. This rate starkly contrasts with the official exchange rate of N1,161 per dollar set by the Central Bank of Nigeria (CBN). This significant appreciation marks a gain of over 40% from early January, when the rate hovered around N1,900 per dollar, to now approximate N1,100.
The CBN has implemented several strategies aimed at bolstering the Naira. These included clearing nearly $7 billion in valid foreign exchange backlogs and supplying foreign exchange to over 1,500 BDC operators at official rates. Additionally, the CBN has taken measures against cryptocurrency platforms like Binance, which have been accused of fostering speculative activities.
Gwadabe lauded the current administration’s efforts, noting the historic nature of the Naira trading lower in the parallel market compared to the official rate—a phenomenon not seen in the past 15 years. “It’s a long journey, it did not start today. It’s a culmination of many factors, even though it happened faster than expected,” he explained. “I want to congratulate the management of the Central Bank. For the first time in the history of Nigeria, over the past 15 years, we have never seen where the open market is lower than the CBN rate.”
He further highlighted the calmness in the market, attributing it to the absence of speculative pressures that previously burdened the Naira. “What we are seeing now is to show what happened before has no economic fundamentals; it’s just a bubble and the bubble has burst,” Gwadabe added. He credited this success to stringent and concerted policy efforts, including the unification of the market rates, which initially created mixed feelings and market disequilibrium but ultimately achieved its objective of convergence.
Gwadabe extended his congratulations to the Nigerian Presidency for their pivotal role in this achievement, emphasizing the benefit of having a unified market rate that supports economic stability.
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