How CBN, BDCs stopped further crash of naira

Ibrahim Apekhade Yusuf

INDICATIONS emerged at the weekend as to how the Central Bank of Nigeria and bureau de change operators (BDCs) rallied round to forestall further crash of the naira.

The Nation was reliably informed that following the crash of the naira from N360 to N400-420 last Thursday, the apex bank moved swiftly to contain the ugly situation by summoning the top echelons of the BDCs to a strategy meeting in what observers said was a “decisive action” to rescue the local currency.

Confirming this development, the President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe in an exclusive interview with our correspondent at the weekend, said the CBN called a meeting with the BDCs as major operators in the forex market to intervene.

“I can tell you without any fear of contradiction that the crash in the naira was purely based on panic and speculations in the market. It was not based on any genuine demand as such because as we speak, there are no major flights anywhere. China’s economy has shut down and so are many other countries as a result of the coronavirus scourge,” he said.

“The movement was as a result of recklessness on the side of the operators, when they want to speculate, but there is no reason for such because the CBN had continued to maintain support for liquidity to the BDC sub-sector,” he stressed.

According to him, the strategy meeting where the BDCs met with the officials of the apex bank yielded good result as the naira returned to a relatively stable position, exchanging for N366 as at Friday.

Specifically, the ABCON boss revealed that the apex bank which had maintained stability at N360 in more than three years, further assured that it has enough forex to meet BDCs demands, as such there is no cause for alarm.

He said in its meeting with the CBN on Thursday, the regulator warned the BDCs against contraventions.

The ABCON president disclosed that the CBN wanted to revoke the licences of some BDCs for various infractions but fined over 100 BDCs over N5m for various offences.

The CBN also expressed its displeasure on the issue in a statement, saying the speculative activities of unscrupulous players in the foreign exchange market was borne out of the impression that the CBN was on the verge of devaluing the Naira, and triggering panic in the FX Market.

“These rumours are false, unwarranted and calculated to serve their dubious and selfish ends,” it stated.

It added, “We have begun a robust and coordinated investigation in collaboration with the Nigerian Financial Intelligence Unit and related agencies to uncover the unscrupulous persons and FX dealers who are creating this panic, and the full weight of our rules and regulations will be meted out to them, including, but not limited to, being charged for economic sabotage.”