Foreign Exchange (FOREX) speculators from Benin Republic, Niger, Chad, Sudan, Ghana and other African countries like scavengers, are cashing in on the wide margin between the official and parallel market rates to make huge profits, the Nation reports.
The speculators are moving in huge dollar deposits to meet the rising demand by Nigerian importers and other buyers requiring dollar to pay their children’s school and medical fees.
Although the exchange rates are high, the urgency and necessity left the buyers with no option than to buy from the parallel market.
The official exchange rate has remained at N197 to a dollar in the last six months, creating a huge gap between the official or inter-bank rates and parallel market rates.
President of the Association of Bureau De change Operators of Nigeria (ABCON), Aminu Gwadabe confirms the development, saying over $100 million inflow was recorded last Friday which has led to a temporary appreciation of the naira against the dollar.
“Foreigners are taking advantage of the naira situation. We have 18 countries within the continent where the naira is accepted. The speculators are coming in because of the huge gap between official and parallel market rates,” Gwadabe said.
Gwadabe confirms that exporters, mainly from Dubai, have agents in Nigeria, who accept naira from importers at agreed dollar rates. The importers travel with certified invoice to bring in the goods, a practice, which has reduced pressure on the naira.
“In my view, the CBN should address the supply side of the market by allowing oil companies and banks to sell dollar to bureau de change operators as a measure to reduce pressure on the naira,” he said.
As at Friday, the naira traded at N365 to a dollar as against Thursday’s N391, because of the liquidity the dollar inflow brought to the market.
The naira further depreciated against the dollar on Saturday as it exchanged at N375 to a dollar, with its continued volatility expected to continue this week.
Tumbling global oil prices have battered Nigeria’s crude exports, with foreign exchange reserves down to an 11-year low at $27.85 billion.
The Federal Government is concerned that further naira depreciation would hurt Nigerians, but the CBN’s refusal to revise the pegged exchange rate widened a gap between official rates and the parallel market.