The rapid appreciation of the naira has dealt heavy losses to forex speculators, with the Association of Bureau De Change Operators of Nigeria (ABCON) warning that these players may resist further gains to recover their positions.
ABCON President Aminu Gwadebe, speaking with Nairametrics, urged the Central Bank of Nigeria (CBN) to sustain its intervention and crack down on illegal speculation. “Demand is weak, and supply is huge. Speculators are already suffering losses,” he said. “The CBN must maintain the momentum and ensure inclusive policies to stabilize the market.”
The naira’s strength follows the introduction of the Enhanced Foreign Exchange Market System (EFEMS), a platform designed to boost transparency and efficiency. Gwadebe highlighted its impact, saying, “EFEMS has brought much-needed transparency and regulatory oversight, enhancing confidence in the market.”
He further called for a real-time, democratized exchange rate system to deepen accountability and market participation, stating, “The CBN has enough liquidity to manage the market, but EFEMS must allow all players to post rates publicly for full transparency.”
The recent consolidation of FX windows and revised guidelines by the CBN have created a unified system, granting licensed BDC operators more active roles in the market.
This move, Gwadebe said, reflects the central bank’s commitment to curbing inefficiencies and allowing the naira to find its true value.
Meanwhile, BDC operators are yet to understand why the naira has appreciated considerably in the last one week.
A BDC operator, who preferred anonymity, said: “People are afraid to buy because they don’t know what might happen next. The gain is too fast in just three days”.
The naira has staged a remarkable rally over the past three days, gaining 8.9% against the dollar in a single week. From an opening rate of N1,672 on Monday, the exchange rate closed at N1,535 by Friday, December 6, 2024.
While the official market recorded steady gains, the parallel market saw even more dramatic shifts, unsettling speculators as the naira surged faster than they could react.
By week’s end, sources said that the parallel market exchange rate had dropped sharply to N1,570/$1, down from N1,700/$1 earlier in the week, underscoring the naira’s strong recovery momentum.