THE President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, has stated that the unorthodox foreign exchange policy of the Central Bank of Nigeria has had a negative impact on the stability of the naira across all markets and created a massive premium between official and parallel market rates.
In a statement, Gwadabe said that with the official market rate at N430/$ and the parallel market rate at N730/$, a massive rate disparity of N300/$ now existed in the markets.Infomation Guide Nigeria
According to him, selling foreign currency earnings at a fixed rate of N430/$ when the open market rate was N730/$ was an unorthodox practise without credibility and transparency.
“That singular act encourages rent seeking, currency substitution that continues to hurt real sector operators and the overall economy,” he said.
When the central bank decided to suspend supplies of foreign currency to Bureau De Change in July 2021, the open market rate was approximately N501 per dollar.
Over a year later, he said, the exchange rate between the naira and the dollar had dropped dramatically, with a large number of Nigerians unable to fulfil their demands for invisible transactions and the regulator showing little commitment to meeting these needs.
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Gwadabe stated that the small retail exchange institutions, the BDCs, remained at the core of the CBN’s application of exchange rate policy; hence, the regulator and public must continue to support the BDCs’ roles in exchange rate stability.Jamb Result
This, he argued, could be accomplished by increasing the automation of their processes and offering more avenues for sustainable price equilibrium, while eliminating rent-seeking, currency substitution, and speculation.
“I am very confident that Nigeria will in not too distant future appreciate a stable exchange rate and availability of forex in the local economy as the right people for government policies’ implementation get such responsibility,” he stated.
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