Posted by News Express | 24 February 2016 | 3,418 times
The Association of Bureaux De Change (ABCON) on Tuesday said it was in support of the Federal Government position not to devalue the Naira.
Its Acting President, Alhaji Aminu Gwadabe, made the remark at a news conference in Lagos on the association’s position and recommendations on the development in the foreign exchange market.
The News Agency of Nigeria (NAN) recalls that the Central Bank of Nigeria (CBN) stopped direct sale of dollars to the Bureaux De Change on Jan. 12, 2016.
Gwadabe said that the ABCON was in support of the Federal Government’s no devaluation stance because bureau de change operations thrived in a climate of stability and calm.
He said, “ABCON, hereby, aligns itself with the stance of the President that there would be no further devaluation of the naira.
“We have always kicked against the devaluation of the naira because we believe it creates more problems than it solves.”
Gwadabe added that the country needed policies that would diversify the economy to increase non-oil export earnings, and reduce importation.
He said that devaluation would increase foreign exchange inflow and reduce demand for foreign exchange.
The acting president recommended that the CBN should review the policy of dollar importation for the purpose of defending the naira.
Furthermore, as a way of reducing demand for dollars, Gwadabe advised the CBN to explore the option of promoting the use and acceptability of the naira for transactions within the West African sub-region.
“We observe that this is already happening at the level of informal trading activities within the sub-region.
“It is our belief that this can be replicated at the level of formal economic activities.”
In order to enhance transparency in the BDC sub-sector, Gwadabe said ABCON had decided to introduce a weekly foreign exchange rate band.
According to him, this will serve as a guide to all BDCs and members of the public on the prevailing exchange rate across the country.
Gwadabe said, “The Rate Band will be operated in line with the regulated foreign exchange rate in the economy.
“This is to forestall exploitation of foreign exchange end-users, and also to ensure that end users are informed enough to avoid falling victims to exploitation.
“The rate band will be announced via a weekly press release that would be circulated to the media for publication.”
He noted that ABCON would seek the approval of relevant monetary and fiscal authorities, as well as partnerships, for effective usage of the nation's external reserves.
The ABCON acting president said that would enhance domestic trade and foreign exchange management.
He insisted that the BDCs were not behind the depreciation of the naira from N265 per dollar to near N400 per dollar.
“Depreciation of the naira affects the working capital of the BDCs and by extension, their turnover.
“The BDCs are able to do more business when the exchange rate is stable and relatively close to the official exchange rate.
“Hence BDCs don’t determine the exchange rate, this is determined by the demand and supply for dollars in the market.
“Nevertheless, we are not happy with the situation and we hope that the demand and supply situation will improve to restore calm and stability in the market.” (NAN)
•Photo shows CBN Governor Godwin Emefiele.
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