NAIRA reversed its two weeks’ loss to the dollar in the parallel market yesterday, appreciating by N20 to N470 per dollar.
President of the Association of Bureaux-De-Change Operators of Nigeria, ABCON, Aminu Gwadabe, said the appreciation of the naira shows the effectiveness of the new CBN’s rule receipt of diaspora remittances.
“Certainly, those hoarding foreign exchange better sell now otherwise they will lick their wounds,” he said.
Gwadabe also spoke on the new rule and how it would impact dollar supply and activities in the BDC sub-sector.
“The monopoly of banks is broken and the policy will induce liquidity in the BDC sub-sector.
“It is true that the volume of diaspora remittances amidst COVID-19 is still huge. In fact, other countries like Kenya and Zimbabwe are recording higher diaspora remittances inflow as a result of skillful medical doctors abroad.
“Nigeria is expected to close the year with over $20 billion diaspora remittances despite the pandemic in 2020.
“The beneficiary is free to collect his proceeds in foreign cash currency and trade it in the BDC sub-sector which will lead to true price equilibrium in the market,” he said.
The naira had earlier depreciated by N30 against the dollar, as the parallel market exchange rate rose sharply to N500 per dollar on Monday, November 30 from N470 per dollar on Friday, November 20.
However, the new rules introduced by the Central Bank of Nigeria, CBN, on Monday, November 30, which allowed beneficiaries of diaspora remittances and foreign exchange transfers into domiciliary accounts, to collect the proceeds in foreign currency cash, halted the dwindling fortunes of the naira.
Credit: Nigerian Pilot