• BDCs to introduce forex band, reforms for parallel market

Foreign currency speculators, who launched an unprecedented attack against the naira in the last two weeks, got their fingers burnt on Tuesday when the nation’s currency staged a major recovery, rising to N310 to a dollar at the close of business, compared to N375 at which it sold on Monday.

The naira fell to an all-time low of about N400 to a dollar on the parallel market last week fuelling concerns that it would plummet further to N450-N500/$ this week.

But findings from THISDAY showed that the naira defied expectations, climbing to as high as N305 to the dollar at some parallel market points in Lagos on Tuesday afternoon, before settling at N310.

Forex dealers and currency analysts attributed the significant gain on the parallel market to excess supply of the greenback in the market, even as it looked like a lot of speculators lost the shirts on their back.

THISDAY gathered from a reliable source that speculators who thought that by attacking the currency last week, coupled with misplaced concerns that the Central Bank of Nigeria (CBN) was going to stop the allocation of forex for school fees and medical bills abroad, this would compel the central bank and President Muhammadu Buhari to alter their stance against the devaluation of the currency.

But they were disappointed when Buhari, in Egypt at the weekend, adamantly ruled out the devaluation of the naira on the grounds that Nigeria does not have the competitive advantage to benefit from an official currency adjustment.

Reacting to the president’s stance, speculators who had been betting that the naira would depreciate further, started dumping the dollars with reckless abandon, effectively creating excess supply of the greenback in the parallel market.

Commenting on the situation in the secondary forex market, the chairman, Association of Bureau de Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said: “The market is moving from perception to reality.”

Similarly, an analyst at Ecobank Nigeria, Mr. Kunle Ezun, predicted that the naira would edge higher in the coming days.

“We expect that the naira would appreciate further. We have always said that what happened last week was purely a speculative attack.

Some people felt that if they pushed the naira down to that level, they could force the CBN to devalue, so that when the naira is devalued and the gap widens further, they would now bring out the dollar cash to make a kill,” Ezun said.

He however urged the fiscal authorities to introduce policies that would help stimulate economic activities, saying that the fundamentals of the economy were still weak.

ABCON also aligned with the federal government’s decision not to further devalue the naira.
Gwadabe said this at a media briefing, pointing out that devaluing the naira would create more problems than it would solve.

He said that as a way of enhancing transparency in the BDC sub-sector, his association had decided to introduce a forex rate band weekly.

This rate band is expected to serve as a guide for all BDCs and the public on the prevailing exchange rate across the country, he added.
In addition, it will be operated in line with the regulated forex rate in the economy.

“This is to forestall exploitation of forex end users, and also to ensure that end users are informed to avoid falling victims of exploitation.

“The band will be announced via weekly press releases that will be circulated to the media for publication.

“ABCON will introduce a series of measures aimed at transforming the operations of BDCs in Nigeria to align with global best practices. These include: review and updating of BDC operational manual; introduction of live trading platforms; automation of all transactions and documentation requirements; and increased partnership with the CBN and other relevant agencies.

“Further, as part of its responsibility as a self regulatoryorganisation (SRO), and also in continuation of its aim to transform its members to compete within the global regulatory currency market, ABCON will seek the approval of relevant monetary and fiscal authorities as well as partnership for effective use of the nation's external reserves to enhance domestic trade and foreign exchange management.

“To this end, our website and internet platforms will be developed to position BDCs to serve as agents of Western Union and currency auctioneers.

“We would also develop platforms that will allow our members to access sources of autonomous foreign exchange like govt agencies, embassies, IOCs and export proceeds, etc,” he explained.
He also urged the federal government to introduce policies that would diversify the economy to increase non-oil export earnings, and reduce imports.

This, according to him, would lead to increased foreign exchange inflow and a reduction in demand for foreign exchange.

In addition to policies that would diversify the economy, ABCON suggested that the CBN should review the policy of dollar importation into the economy for the purpose of defending the naira.

According to the association, the central bank should introduce a policy whereby the naira is used to intervene in the real sectors of the economy to boost productivity.

Furthermore, Gwadabe said as a way of reducing demand for dollars, the CBN should explore the option of promoting the use and acceptability of naira for transactions within the West African sub-region.

He added: “We observe that this is already happening at the level of informal trading activities within the sub-region, and it is our belief that this can be replicated at the level of formal economic activities.”

http://www.thisdaylive.com/articles/speculators-get-their-fingers-burnt-naira-strengthens-to-n310-/232783/

Sai Buhari.

Where are those that called Buhari a Dullard?

Where are those that insulted the Minister of Finance?

Where are the Doom Prophets?

When we said this artificial scarcity of Dollars, was orchestrated by the last standing soldiers of the Clueless one, we were called names. It's alright, Nigeria is getting there now.

Buhari 5- Boko Haram 0

Buhari 5- Corruption 0

Buhari 5- Artificial scarcity 0

Buhari 5- MTN 0

Buhari 5- The Economy IMPROVING.


Changeeeeee.

Everyone knows it was an artificial scarcity.

Narrow escape for me as I was about to begin this buy and sell business. I was about to buy dollar in U.S for 330 to sell in Nigeria for 400+

HungerBAD:
Sai Buhari.

Where are those that called Buhari a Dullard?

Where are those that insulted the Minister of Finance?

Where are the Doom Prophets?

Where them dey...... Fake Analyst and Economist..... One by one them don dey go.

“We expect that the naira would appreciate further. We have always said that what happened last week was purely a speculative attack". - Ecobank Analyst

HungerBAD:
Sai Buhari.

Where are those that called Buhari a Dullard?

Where are those that insulted the Minister of Finance?

Where are the Doom Prophets?

When we said this artificial scarcity of Dollars, was orchestrated by the last standing soldiers of the Clueless one, we were called names. It's alright, Nigeria is getting there now.

You are worrying yourself, wailers are merely bitter that the end of looting has come and they have no other skill or talent to make a living. If they can't beat the succeeding party they will eventually join them. Some emotional ones are busy shouting rising sun at sunset. Funny lots...change is here to stay

olu77:
Narrow escape for me as I was about to beging this buy and sale business. I was about to buy dollar in U.S for 330 to sell in Nigeria for 400+

You are obviously one of the unpatriotic speculators trying to make gain without adding value to the economy.

Kudos to the president for standing is ground despite the pressure. Before the end of the week, the Naira would have relied back and stabilise at under N300 to a dollar. Shame on all the unpatriotic wailers who take pride in running down the government and abusing the president for doing the right thing.

The attack on our currency will be wade off, the economy will stabilise and the PMB administration will bring the desired change to the country.

PentiumPro:


You are obviously one of the unpatriotic speculators trying to make gain without adding value to the economy.

beautiful you.

I run a home for fatherless children, all the proceed would have gone there.

Now am I patriotic or not?

olu77:
Narrow escape for me as I was about to begin this buy and sell business. I was about to buy dollar in U.S for 330 to sell in Nigeria for 400+

Thank God for your life..... Else your whole body would have been burnt not just your fingers alone.

seunmsg:
Kudos to the president for standing is ground despite the pressure. Before the end of the week, the Naira would have relied back and stabilise to under N300 to a dollar. Shame on all the unpatriotic wailers

I dey tell you

HungerBAD:
Sai Buhari.

Where are those that called Buhari a Dullard?

Where are those that insulted the Minister of Finance?

Where are the Doom Prophets?

When we said this artificial scarcity of Dollars, was orchestrated by the last standing soldiers of the Clueless one, we were called names. It's alright, Nigeria is getting there now.

Buhari 5- Boko Haram 0

Buhari 5- Corruption 0

Buhari 5- Artificial scarcity 0

Buhari 5- MTN 0

Buhari 5- The Economy IMPROVING.

we need a better nigeria not by shouting sai baba, this time now baba is saudi arabia , hitting his head on the floor. So I pray more strength to our naira please. I love buhari stand on that devaluation that's good.

olu77:


beautiful you.

I run a home for fatherless children, all the proceed would have gone there.

Now am I patriotic or not?

Lol! You are not! What you were trying to do is purely Rent seeking, making money without creating wealth.

Buhari is one lucky human being,looks like his economic stubborness is paying off!!!

When the Naira fully recovers people better start apologizing to Buhari and Emefiele. Bless those men with more strength,knowledge and follow through. We're getting there.

jcross19:
we need a better nigeria not by shouting sai baba, this time now baba is saudi arabia , hitting his head on the floor. So I pray more strength to our naira please. I love buhari stand on that devaluation that's good.

Mmmmmh.

Here is what My Able President is doing in Saudi. Read and be enlightened.

http://www.thisdaylive.com/articles/buhari-s-oil-agenda-in-saudi-arabia/232729/

PentiumPro:


Lol! You are not! What you were trying to do is purely Rent seeking, making money without creating wealth.

Believe me beauty

All the Pseudo economist on orijin+alomo running their traps & creating misinformed threads on NL within the past few days have been left with eggs on their faces!!

It should go back to 220 first, then we can talk!

Good one for Nigeria,

Seems Buhari nicodemusly contacted Ifeanyi Ubah[quote][/quote]

modath:

All the Pseudo economist on orijin+alomo running their traps & creating misinformed threads on NL within the past few days have been left with eggs on their faces!!

It should go back to 220 first, then we can talk!

Tell them Oooo

The first thing I said when I read this was "Praise God"...
Thats how I went to buy plantain yesterday and the seller gave me some miserable looking plantain for 200h,when I asked why,she looked at me like I was daft and replied "Dollar don dear"...Na so I jejely carry myself and said plantain face house oo.

Lalasticlala..... Front page

I heard Buhari went to pray in Mecca,God has answered his prayers....lol
God bless Emefiele
God bless the General
God bless Nigeria
#IStandWithBuhari

modath:

All the Pseudo economist on orijin+alomo running their traps & creating misinformed threads on NL within the past few days have been left with eggs on their faces!!

It should go back to 220 first, then we can talk!

Say IT Loud

The majority of Nigerians stand with Buhari. Wr are fighting for our today and children's future. Forces of retrogression are insisting we maintain the status quo but we say Change is inevitable.

This is jst bullshit, business is still not stable

yes

this is great news

however this is not good enough

let it go back to at least 199

from there we can start ranting

sai baba

for now na siddon look

g

Matters arising. . . .