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Forex speculators lose 100 billion naira as CBN backs massive financing for BDCs

By on May 21, 2021 0

Currency speculators are expected to lose more than 100 billion naira over the next month, with the Central Bank of Nigeria (CBN) backing massive funding for Exchange Bureau operators (BDCs).

Indeed, the umbrella bank still sells dollars to BDC operators at 393 naira to the dollar.

The disclosure was made by Association of Bureaux De Change Operators of Nigeria (ABCON) President Alhaji Dr Aminu Gwadabe on Friday in Lagos, who said the CBN had pledged to improve funding by more than 5,000 BDC nationwide in a new move to deepen market liquidity and protect the naira from speculators.

READ: FG says $ 25 billion in FDI helped boost country’s economy after recession

He called for the return to normalcy of the market, as the ongoing speculative behavior that hinders operations and market stability will result in a huge loss for speculators.

The ABCON boss has linked the continued decline of the naira in the parallel market and the Forex Investors and Exporters (I&E) window to currency speculators who are racking up dollars to profit from the currency crisis.

He said the authors are creating an artificial scarcity of the greenback in the market to cause more trouble for the local currency.

READ: CBN injects fresh $ 51.8 million into forex markets

Gwadabe said ABCON management and CBN licensed BDCs will fight alongside the regulator to ensure speculators lose their capital if they persist in illegal activity.

He said, “ABCON and CBN have observed with disdain the speculative behavior that is currently clouding the market with misinformation that the CBN has adopted the I&E window as its official rate. The above information is not true because as operators we have always funded our accounts at our normal rates of N393 / $ and not at window I&E rates for our Friday operation.

He advised BDCs not to join in on rumors that create confusion and fragility in the market.

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Gwadabe said: “ABCON will continue to keep you informed and guide you accordingly. We urge all members to continue to give the CBN the greatest support as a strategic partner and in the interests of the economy. ”

He said CBN-licensed BDCs are fighting back by helping the umbrella bank to target forex spectators and reiterating their commitment to operate by set rules.

Gwadabe said the “naira for dollar policy” implemented by CBN Governor Godwin Emefiele would further increase market liquidity and improve the status of the naira.

This policy, he added, will provide Nigerians in the diaspora with cheaper and more convenient ways to send funds to Nigeria and increase the inflow of dollars into the economy.

He reiterated the provision of an information circular on remittances, in which the governor of the CBN said the bank introduced remittance of N5 for every dollar of remittances remitted to Nigeria, through International Money Transfer Operators (IMTO) approved by the Central Bank to encourage the process of sending funds.

He said the new measure would help make the process of sending remittances through formal banking channels less expensive and more convenient for Nigerians in the diaspora.

Gwadabe said the BDCs will continue to defend the naira by complying with the anti-money laundering and terrorist financing (AML / CFT) policy, supporting the CBN’s exchange rate stability policies.