Strong indications have emerged that the Nigerian currency, the naira may return to gaining streak this week, against the US dollar and other major foreign currencies, due to the Central Bank of Nigeria (CBN) proposed increased dollar sale to the bureau de change segment of the forex market.
Throughout last week, the local currency was seen hovering between 405- 410 to the dollar on the parallel market, compared with 398 to a dollar the previous week.
At the official window, the trading week closed at 306.5 to the dollar against 306.1 per dollar on Wednesday.
However, forex traders are optimistic that the naira would bounce back this week on an increase in dollar sales to the retail currency bureaux.
Precisely, two weeks ago the Nigerian currency lost 8 points to exchange at N398, weaker than N390 recorded a week earlier, but indications are rife that the central bank is planning to raise dollar sales to the BDCs to $40,000 from the present $20,000, which will improve liquidity and help support the local currency.
Although, activities from speculators and the nation’s porous borders have been linked to the recent drop in the local currency gains, as proceeds of illegal foreign currency evacuation floods Dubai market and marred naira journey to stability and sovereignty.
This is even as the Bureau de Change operators in the country through their President, Aminu Gwadabe, has said that for government to ensure the naira remains stable on its sovereign journey, there must quick review and increase security surveillance of our nation boarders and airports.
According to him, “Return of illegal foreign currency cash evacuation through our Porous borders and airports, as Dubai in UAE enjoy the illegal evacuation, operators/players compromise, sales of debit cards by banks rather than cash, maximum $10,000 cash allowable for travelers at the nation airport.”
However, Nigeria being an import dependent economy, strengthening of the local currency has said not be luck but a choice the nation have to make.
Gwadabe, therefore advised the federal government to ensure the naira remains stable on its sovereign journey by creating special purpose window for foreign investors at the BDCs sub sector like that of IMTSO to diversify streams of foreign reserve.
He requested for more liquidity to the BDCs sector to ensure sector market liquidity and availability, adding that review of allowable margin to N5 than N2 per US dollar.
“Monitoring and supervision by regulators and relevant agencies, as well as review the limit of max $10,000 allowable to $20,000 for travelers at our Airports, with localization of our products and industries.