Dr. Aminu Gwadabe, the National President of the Association of Bureaux De Change of Nigeria (ABCON), shared exclusive insights with NewsNow’s Correspondent, Ariemu Ogaga, discussing the recent depreciation of the Naira and proposed solutions for achieving foreign exchange stability in Nigeria. Here are the key points from the interview:
Assessment of Recent Naira Depreciation:
The recent downward trend in the value of the Naira has raised concerns due to unexpected developments. Several factors have contributed to this situation, including speculative behaviors in the market and pressures from online trading platforms affecting the Naira’s performance.
Intervention Measures by the Central Bank:
Despite interventions by the Central Bank of Nigeria, such as providing funds to eligible BDCs at a fixed rate, the Naira’s value in the parallel market did not align with the desired outcome. Liquidity challenges at the retail market level have exacerbated the situation.
BDCs’ Role in Exchange Rate Stability:
Gwadabe emphasized the significance of BDCs in the transmission of foreign exchange policies by the Central Bank. Collaborative efforts between the central bank and BDCs have proven effective in unifying exchange rates and boosting the Naira’s value.
Addressing Currency Speculation:
Gwadabe debunked the misconception that BDCs are solely responsible for currency fluctuations, citing the need for a broader perspective on market dynamics. He highlighted the importance of diaspora remittances and praised the Central Bank’s initiatives to curb illegal economic activities.
Harmonizing the FX Market:
ABCON’s plans to streamline the retail segment of the foreign exchange market aim to enhance transparency and efficiency through digital platforms. The move is expected to facilitate price discovery and compliance with regulatory requirements.
Evaluation of CBN Governor Cardoso’s Leadership:
Gwadabe commended the professionalism and proactive approach of Governor Olayemi Cardoso and his team at the Central Bank. He noted the positive impact of their market reforms and emphasized the importance of agility in addressing challenges.
Solutions for Naira Stability:
In the short term, Gwadabe proposed closer collaboration between fiscal and monetary authorities to tackle market volatility promptly. He recommended incentivizing diaspora remittances and enhancing non-oil exports for long-term economic stability.
Final Words:
Gwadabe urged Nigerians to support efforts aimed at strengthening the Naira and avoiding detrimental practices like currency substitution and hoarding. He emphasized the importance of trust in government interventions to stabilize the economy amid inflationary pressures.