FOREIGN exchange (forex) speculators from Benin Republic, Niger,
Chad, Sudan, Ghana and other African countries are cashing in on the
wide margin between the official and parallel market rates to make huge
profits ,The Nationhas learnt.
The speculators are moving in
huge dollar deposits to meet the rising demand by Nigerian importers
and other buyers requiring dollar to pay their children’s school and
medical fees.
Although the exchange rates are high, the urgency
and necessity left the buyers with no option than to buy from the
parallel market.
The official exchange rate has remained at N197
to a dollar in the last six months, creating a huge gap between the
official or interbank rates and parallel market rates.
Confirming
the development, President of the Association of Bureau De change
Operators of Nigeria (ABCON) Aminu Gwadabe said over $100 million inflow
was recorded last Friday.
He said this led to a temporary appreciation of the naira against the dollar.
The
naira, on Friday, traded at N365 to a dollar – from N391 the previous
day – because of the liquidity the dollar inflow brought to the market.
Gwadabe
said by Saturday, the naira again depreciated against the dollar as it
exchanged at N375 to a dollar, adding that the volatility is expected to
continue this week.
“Foreigners are taking advantage of the
naira situation. We have 18 countries within the continent where the
naira is accepted. The speculators are coming in because of the huge gap
between official and parallel market rates,” he said.
Gwadabe said exporters, mainly from Dubai, have agents in Nigeria, who accept naira from importers at agreed dollar rates.
The importers travel with certified invoice to bring in the goods, a practice, he said, reduced pressure on the naira.
“In
my view, the CBN should address the supply side of the market by
allowing oil companies and banks to sell dollar to bureau de change
operators as a measure to reduce pressure on the naira,” he said.
Tumbling
global oil prices have battered Nigeria’s crude exports, with foreign
exchange reserves down to an 11-year low at $27.85 billion.
The
Federal Government is concerned that further naira depreciation would
hurt Nigerians, but the CBN’s refusal to revise the pegged exchange rate
widened a gap between official rates and the parallel market.
Managing
Director of Cowry Assets Management Limited Johnson Chukwu said
economic agents “are rational, and will go to where their values will be
maximised or their risk minimised”.
He said Nigeria did not have
the financial resources to solely develop its economy in the short to
medium term and that current global social architecture made absolutely
closed economic borders impossible.
“The crisis in the economy seem
to be worsening since the crash in oil prices from about $115.09 (Brent
crude spot price) on June 19, 2014, to $34.83 (Brent crude) today.
“This
is despite a barrage of monetary and administrative policies introduced
by the CBN to stabilise the exchange rate and restart economic growth.
“While
the CBN has been active in trying different options, business managers
and investors are still waiting for the managers of the fiscal policies
to present their response to the crises, which should be harmonised with
those of the monetary authorities,” he said.
Chukwu insisted
that while the CBN effectively maintained the official exchange rate at
N197 to a dollar, it has been impossible for it to meet the legitimate
demand at the official window at the stipulated official rate.
“It is the backlog of unmet demand, which has spilled over to the shallow parallel market and driven down the naira,” he said.
http://thenationonlineng.net/forex-speculators-from-benin-republic-ghana-others-invade-nigeria/
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