Naira Depreciation: How To Restore Naira Below ₦1,000 Per Dollar – BDCs President Reveals

The National President of the Association of Bureau De Change Operators of Nigeria, ABCON, Aminu Gwadabe, discussed the recent Naira depreciation and solutions for stability. 

He attributed the depreciation to various factors, including demand pressure and speculative behaviour. 

Despite recent Central Bank of Nigeria (CBN) interventions, liquidity shortages persisted, impacting the retail market. 

In an interview with DAILY POST, Gwadabe emphasised the importance of collaboration between the CBN and BDCs to achieve stability. 

He addressed misconceptions about BDCs’ role in currency fluctuations and highlighted recent CBN policies to discourage illegal practices. 

Gwadabe commended Cardoso’s leadership at the CBN and proposed short-term solutions, such as citizen amnesty, and long-term strategies, including diversification of foreign earnings. 

Addressing the underlying issue of the Naira’s renewed depreciation in the last couple of weeks, Gwadabe said, “The Naira’s recent negative downward trend is worrisome and has come with many surprises.

“Our interrogations revealed the following perspectives.

“First, we discovered that after the Naira achieved considerable strength to an all-high at below ₦1000/$, precisely ₦969/$, around April 8th, 2024, some rational behaviour, not fundamental, erupted. People were buying dollars from the open market and selling at the interbank window, and thus, there was significant demand pressure on the Naira, and it turned its positive strides to weakness.

“In the same vein, the activities of the online platforms come with serious debacles, where traders put pressure on the open market and dump the inline platforms where the Naira is badly traded.

“As long as the platforms remain profitable, the Naira must continue depreciating.

“Thirdly, the continuous attacks of speculators to reap their lost gains on naira depreciation is another issue. They have continued to speculate and hold their position.“

The ABCON president elaborated on the organisation’s strategy to unify the retail section of the FX market, detailing plans for digitalisation and enhanced collaboration among stakeholders, aiming to confront Naira depreciation through improved market efficiency and transparency.

“In line with our vision to democratise, centralise and digitalise the retail end market, ABCON, as a proactive organisation and a strategic partner in the retail end FX market, has identified the trust we build with our clients and embraced innovation as part of our journey to automate our business process from manual to digital and develop a unified retail end forex market for stakeholders engagements and trading to confront the menace of undocumented and unregistered platforms like Binance, Bybit, etc.

“The unified platform helps with price discovery, autonomy, reporting, market intelligence reports, and ease of monitoring and supervision of regulatory and security agencies.

“We have inaugurated our state chapter chairmen to support our zonal chairpersons nationwide in repositioning data on market participants in their respective zones.

“We also expect to unveil our upgraded SAAZ MASTERS for our members’ efficiency and effectiveness with their extant regulatory obligations.

“These unified digital trading platforms will enable price discovery, our member’s visibility, and effective AML/CFT compliance,” The ABCON president stated.

Gwadabe urged citizens to adopt a new mindset to bolster the Naira’s sovereignty in West Africa, advocating against currency substitution, hoarding, speculation, and round-tripping, while emphasising the importance of caution amid government and CBN efforts to enhance liquidity and fortify the Naira.

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