A Bureau De Change operator, Alhaji Aminu Gwadabe, has identified speculation, hoarding and increasing zero confidence of foreign investors among others as the reason for the continued spike in the exchange rate.
Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON), made the assertion on Thursday in an interview with the News Agency of Nigeria (NAN) in Lagos.
The ABCON chief also said that the existence of a Non-Derivable Forward (NDF) market in London that enjoyed the patronage of Nigerian companies and foreign investors contributed to dollar liquidity challenge.
According to him, the NDF market rate hovers around N430 to a dollar.
“The existence of that market is a challenge to liquidity inflow to our own market,” Gwadabe said.
The financial expert explained that Diaspora remittances had recently declined as most of the newly registered International Money Transfers Operators (IMTSO) had yet to send inflows.
Gwadabe called for a robust and sustainable dialogue between operators in the forex market and the regulator to ensure an urgent solution to “the unfortunate situation”.
He noted that most countries experiencing recession were already getting out of it but wondered why the Nigerian situation was “lukewarm”.
Gwadabe said that the regulators encouraged flexibility in the rates of foreign investors’ inflows as a temporary measure to boost liquidity in the market.
In the same token, he called on the regulators of the forex market to also boost supply to the BDCs sub-sector.
Gwadabe decried the situation where some government agencies were alleged to have relied on the parallel market exchange rate quoted by abokifx.com instead of the CBN controlled rate for their transactions.
He said the distribution of forex by Travelex had been hitch-free, adding that ABCON was in partnership with three commercial banks to distribute forex to BDCs in Abuja, Kano and Awka.
NAN reports that the gains recorded by Travelex in the distribution of the proceeds of Diaspora remittances was rapidly being eroded by the recent spike in the Naira exchange rate.
The Naira continued to appreciate across all the major segments of the forex market at the onset of the implementation of the pact between BDCs and Travelex as directed by the CBN.
However, since the raid on the parallel market by security operatives, the Naira had embarked on a steady decline at the parallel market.
The Naira on Thursday depreciated further at the parallel market, exchanging at N483 to a dollar, from N480 posted on Wednesday, while the Pound Sterling and the Euro closed at N585 and N507, respectively.
At the BDC window, the Naira exchanged at N399 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro closed at N585 and N506, respectively.
Acute dollar shortage has forced Travelex to reduce the 15, 000 dollars weekly sales to BDCs to 8,000 dollars.
As the country struggle to improve its receipt from the sale of crude and to reflate the economy through diversification of its earnings, stakeholders count on improved remittances to spice up the economy.