CBN warns currency speculators as forex intervention begins

Speculators in the Nigerian foreign exchange market have been warned not to engage in round-tripping following the decision of the Central Bank of Nigeria to inject liquidity in the system.

The apex bank had on Monday commenced sales of forex to the Investors and Exporters window ahead of the re-opening of international flights on September 5.

The bank is also expected to resume forex sales to bureau de change operators on September 7 as CBN explained that sales would be gradual and done twice a week, Mondays and Wednesdays.

Prior to the CBN’s commencement of sales to the I&E window, naira traded at N480 to the dollar.

The bank said the fall in the naira had prompted fears that the nation’s currency was going for a free fall.

The naira began to witness gradual resurgence as the apex bank announced the resumption of forex sale to BDCs.

The naira, however, traded at N420/$1 in the BDC segment of the market on September 2, 2020, plunging speculators into “losses, following their failure to heed warning signs.”

The CBN Director, Corporate Communications Department, Isaac Okorafor, said, “The bank had concluded plans to inject liquidity into the foreign exchange market by selling forex to licensed BDC operators.”

The spokesperson noted the apex bank had directed BDCs to ensure that their accounts with their banks are adequately funded to ensure seamless transactions.

Okorafor further warned speculators to desist from what he termed unpatriotic tendencies but to comply with the CBN guidelines.

The President of the Association of Bureau de Change Operators of Nigeria, Aminu Gwadabe, expressed support for CBN.

He said the proposed intervention in the BDC sector would ensure stability in the foreign exchange market and that speculators in the forex market had been dealt a blow with the sharp drop in the exchange rate.

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