President, Association of Bureux de Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, has said that the newly introduced Nigerian Autonomous Foreign Exchange (NAFEX) rate for foreign investors and exporters window will make naira sovereign and stronger in the market.
Speaking with newsmen in Lagos on Tuesday, Gwadabe noted that the new market derivative will enhance a transparent, accountable and secured naira determination.
He added that the new policy would enable the Central Bank of Nigeria (CBN) to generate huge inflows running into billions of dollars to defend the local currency.
According to him, the window will reverse completely the zero level confidence of investors to highest level of confidence in the market.
“The window will outwit and rattle all strata’s of operations of unofficial foreign exchange market.
“The window will see a robust and stable planning of foreign exchange demand decision of businesses. It will also counter volumes of fx transactions in the so-called shallow parallel market.
It will finally smoke out hoarders and speculators outside their holes. This is pretty the end of all frivolity in the forex market.
Meanwhile, at the end of trading on the unofficial forex market yesterday, the naira steadied at 384 to a dollar, slightly appreciated from the 385 traded on the first trading day of the week.
The local currency on Monday rose to 385 per dollar in the parallel market even as the Central Bank of Nigeria (CBN) injected another $246.2 million into the foreign exchange market.
A survey of the parallel market revealed that the parallel market exchange rate which closed on Friday at N385 per dollar, dropped to N382 per dollar due to expectation of dollar sales to Bureaux de change (BDCs) by the CBN.
Meanwhile, the apex bank continued with its intervention in the foreign exchange market yesterday by offering $246.2 million to authorized dealers at the forex auction in the interbank wholesale window, Small and Medium Enterprises (SMEs) and invisibles segments.
A breakdown of the total offer indicates that the sum of $150 million was auctioned at the wholesale window while SMEs and invisibles got $52 million and $44.2 million respectively.
However, the Acting Director, Corporate Communications, CBN, Mr. Isaac Okoroafor, has said that the forwards sales would be concluded in the days to come. He, however, added that the CBN will continue its weekly sale to dealers in the BDC segment this week in order to guarantee onward sale to end users.
According to him, the Bank’s continued interventions in the different segments had guaranteed availability to individuals and business concerns. He disclosed that the Bank was satisfied with the feedback it received concerning the response of Small and Medium Enterprises (SMEs) to access forex from the new CBN window.
He said the CBN was particularly determined to ease the challenges hitherto encountered by small manufacturers hence the move to provide them with easy access to forex.
“SME operators no longer have to patronize or source foreign through unofficial windows and no more pressure on either the BDCs or any other unofficial source with the opening of the special window,” he added. It will be recalled that the CBN, also last week, created a Forex window for investors and exporters, which it named: “Investors’ & Exporters’ FX Window”. The CBN circular, which announced the creation of the new window, disclosed that the purpose of the window was to boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.