ABCON asks Central Bank to diversify forex disbursement

ABCON President,Aihaji Aminu Gwadabe

 By Chijioke Nelson

 The Association of Bureaux De Change Operators of Nigeria (ABCON), at the weekend, urged the Central Bank of Nigeria (CBN) to diversify its foreign exchange (forex) disbursements in the thrice-weekly intervention to them.

In the new call for the expansion of the currency dealers’ reach in the official forex market includes the just brokered $2.5 billion currency swap agreement between the Central Bank of Nigeria (CBN) and the People’s Bank of China (PBoC).
The call came on the heels of the group’s success in negotiating a downward review of their buy/sale rates at the official window from N360/N362 per dollar to N357/N360 per dollar, an indication of a strong bargaining strength at the nation’s forex market.
ABCON President, Alhaji Aminu Gwadabe, who made the call said the diversification of the forex disbursement would also help to meet the critical needs of their numerous clients travelling to China for personal and business purposes.
He explained that if implemented, such move will further deepen the interest in purchasing Yuan and reduce dollar demand, which appear to have monopolized the activities at the market.
Gwadabe noted that the currency swap deal was part of the CBN’s plan to keep the naira stable and protect the foreign reserves domiciled in dollars.
According to him, the deal will provide adequate local currency liquidity for Nigerian and Chinese industrialists and reduce difficulties they face in searching for the greenback before transactions can be consummated.
The ABCON chief said that the naira will benefit hugely from the deal, given the rising influence of Chinese Yuan in the international market.
He explained that the admittance of Yuan into the basket of International Monetary Fund (IMF) currencies and the Naira/Yuan swap deal will actualize the dream of naira sovereignty in Africa.
“The naira has remained stable at both the official and parallel markets, as the CBN continues its weekly dollar interventions. The naira, which in February 2017 was exchanging at N520/$ in the parallel market now exchanges at N361/$ while rate at the official market remains N305.9/$.
“The Yuan has equally made significant progress this year, appreciating 1.8 per cent against the dollar, to become the world’s second-strongest Asian currency.
“BDCs will equally benefit from the swap deal, given that a stable and strong naira is good for the economy and operators, while increased use of Yuan in trade deals will also open a new business opportunity for BDC operators,” he said.
Justifying the assertions, he said that China has remained Nigeria’s largest import partners over the last five years, with figures standing at over 20 per cent of Nigeria’s total imports.
He however, advised that to achieve the full gains of the deal, Nigeria has to take steps to boost its trade balance with China by raising the quality of local products to make them more attractive and acceptable to the Chinese people.