The Naira recorded an appreciation of 12.36 per cent at the parallel market in the last one week, the News Agency of Nigeria, NAN, reports.
While the Naira appreciated, the leader of bureau de change operators in Nigeria said his members lost N130 million due to the mode of Central Bank’s intervention in the past week.
NAN reports that the Naira traded at N440 last Monday while it closed at N390 to the dollar on Friday.
In the week under review, experts commended the Central Bank of Nigeria, CBN, for its intervention at the foreign exchange market, but appealed to the apex bank to eliminate the multiple rates in the market.
As the Naira continues to appreciate, experts say it is necessary for the CBN to adjust applicable rates in different segments of the market in the overall interest of the economy.
Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria, ABCON, said CBN-licenced BDCs incurred regulatory losses of N130 million in the week under review.
Mr. Gwadabe told NAN that the losses came from the Central Bank’s disparity in applicable exchange rates among players in the market.
According to him, the public has refused to buy foreign exchange from BDCs for invisibles such as medicals, school fees, and personal and business travel allowances at a rate above N375 to the dollar.
He urged the CBN to promptly address the issue.
The Central Bank has injected over 1.5 billion dollars to the interbank market since it started its intervention in February.
Mr. Gwadabe also called on security agencies to curb illegal currency transactions at Nigerian borders to sustain the recent appreciation of the Naira against other foreign currencies.
He said that recent surveillance of the nation’s boarders by combined teams of security agencies helped to reduce frivolous demand for the dollar by 80 per cent.
According to him, the reduction in the frivolous demands of the dollar accounts for the magnificent strength of the naira at the foreign exchange market.
“I urge both the regulators and the relevant security agencies to continue to keep faith with their surveillance efforts on illegal transactions for a quicker rates convergence and true value of the Naira,’’ he said.
Mr. Gwadabe said the inability of banks to clear the $100 million offered by CBN on Friday and the return of about $19 million unutilised funds, testified to the elimination of frivolous demand in the system.
“This also shows that the BDCs are better positioned in networking, convenient and more effective than the conventional banks in the elimination of rates disparity.
“The BDCs have helped the CBN to achieve this objective from 2006 to date.
“The CBN should quickly look into the review of applicable exchange rates and volumes for the BDC subsector to ensure speedy rates convergence and true value of the Naira,’’ he said.
Financial experts are of the opinion that unless the CBN eliminates multiple exchange rates in the market, its efforts at rates convergence and the sustenance of the gains recorded by the Naira could be reversed.