Following the economical crisis and level of hardship, the Association of Bureau de Change Operators of Nigeria has noted that the recovery of the naira has led to decrease in prices of goods and services in order to promote development in the country.
Aminu Gwadebe, the president of the association, reported this in a statement issued on Saturday.
He appreciates the fact that Central Bank of Nigeria allow Bureaux de Change to operate in the foreign currency market, saying that it was a major factor in the recovery of the naira.
In order to measure and stabilise the local currency, the Central Bank of Nigeria banned the Bureau De Change operators in July 2021.
ABCON had been championing the campaign for BDCs to be allowed to operate formally in the currency market.
In February, the Apex bank did not approve of Bureau De Change operators in the official forex market.
ABCON president statement said aside from monetary policy tightening that led to interest rate hikes and more investment in government infrastructure and clearance of forex backlog forward commitments, the recall of the BDCs had significantly boosted dollar liquidity at the retail end of the forex market.
Gwadabe noted, “The current development in the foreign exchange market has started reining in inflation as the prices of most necessities are becoming relatively lower in the market. On a most serious note, the positive impacts also include heightened confidence of the public in the local currency as it eliminates currency substitution behaviour, which has hitherto been adding pressure on our local currency.
“The reconsideration of the BDCs into the mainstream foreign exchange market has not only demystified illegal economic behaviours such as hoarding, rent-seeking, round-tripping, and FX holding positions but also led to the emergence of exchange rate convergence.”
He stressed that with the decrease of naira, the price of international school fees had dropped by 15 percent; the cost of medical tourism had been reduced by 20 percent and prices of air fares for local and international trips had dipped by 25 percent.
Gwadabe explained that the success story was unending as the naira traded at 1,255/$ on Saturday, lower than the 1,269.77/$ BDCs were advised to sell.
Describing the ongoing market development as revolutionary, Gwadabe declared that a stable naira would attract more foreign portfolio inflows to the economy.
He stressed that the gains under Dr Olayemi Cardoso the CBN governor is recognising the power of BDCs in securing stable exchange rates cannot be over-emphasised.
He also mentioned that the previous practices where Nigerians based in Dubai brought dollars home for sale at high rates had reduced, after the rapid recovery of the naira against the American greenback.
Few days after the Monetary Policy Committee raised the interest rate by two percent, Gwadabe explained that prospects for forex earnings were promising, with foreign portfolio investments on the rise and over $1.5bn inflows.
He declared: “It is our view that the collaboration between the BDCs, CBN, National Security Adviser, Economic and Financial Crimes Commission, as well as support from the Presidency, helped in creating the opportunity for building the foundation of this achievement. Overall, the combination of these actions has induced an atmosphere of public calmness, confidence, hope and liquidity in the markets.
“We call, therefore, on the CBN to continue to calibrate the existing relationship between the BDCs and the apex bank to sustain the success story.”
