22 September 2016, Abuja – The Association of Bureau De Change Operators of Nigeria says it foresees the naira on the path of recovery by Monday due to the introduction of Travelex, a licensed Forex dealer.
The President of ABCON, Alhaji Aminu Gwadabe, said on Thursday in Lagos that a licensed Forex dealer would enhance transparency in the distribution network.
Travelex, an international money transfer organisation, was officially directed by the Central Bank of Nigeria to distribute Forex to Bureaux De Change operators by Monday.
Gwadabe said that a licensed Forex dealer would enhance transparency in the distribution network.
According to him, Travelex has the technology to sell Forex to about a 1,000 BDCs within a couple of hours, which is a major advantage.
He said, “Against this background, the naira is expected to be on a recovery path from Monday as the distribution of Forex to BDCs will boost liquidity in the market.
“The boosting of liquidity in the market will dampen the fears of investors and market speculators, thereby raising their confidence in the market.
“This is a purely ABCON and Travelex arrangement, and has the capacity of removing the bottlenecks in the Forex distribution chain.
“Travelex has the technology to pay about 1,000 BDCs within two hours.
“The new arrangement also eliminates relating with bank account officers”
On the CBN’s retention of the Monetary Policy Ratio at 14 per cent, Gwadabe said, “I agree totally with the decision of the apex bank to retain the rate.”
He said that there was an inverse relationship between inflation and interest rate, adding that an increase in liquidity in the economy could put pressure on the exchange rate.
He said, “The more naira at the disposal of Nigerians, the more they want to convert it to dollars for speculation purposes.”
The coming of Travelex into the Forex distribution chain was a response to easing liquidity challenges in the market.
The Nigerian currency has had scarcity of Forex challenges leading to a sustained depreciation of the naira in almost all the segments of the market.
The liquidity challenge moved the apex bank to reconsider the sale of Forex to BDCs when it was apparent it could not sustain the ban.
Since the resumption of Forex to BDCs, ABCON had complained of poor distribution of Forex to its members which led the association to plead for an independent body to take over the distribution.
Stakeholders in the Forex market believed that the latest development would see the naira mounting the wheel of recovery.