CBN Warns Currency Speculators As Forex Interventions 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 that segment of the economy.

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.

The apex bank explained that sales would be gradual and will be done twice a week between Mondays and Wednesday.

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 N420 to a dollar in the BDC segment of the market on Wednesday, September 2, 2020.

CBN said as a result, speculators plunged 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.

He urged registered BDCs to comply with the CBN guidelines as the Bank would not hesitate in sanctioning any erring dealer.

He assured those requiring foreign exchange for travel, educational fees and other invisibles could source over the counter from their respective banks.

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

He said the proposed intervention in the BDC sector would ensure stability in the foreign exchange market.

The ABCON boss noted that speculators in the forex market have been dealt a huge blow with the sharp drop in the exchange rate.