The Central Bank of Nigeria (CBN) may lose the battle in defence of the Naira, if the growing demand for the Pound Sterling and the Euro by speculators was not checked
According to a foreign exchange market specialist, the excessive demand for the Sterling and the Euro, by speculators for currency trading conversion may, cause distortions on the established stable exchange rate.
It was gathered that foreign currency trading was the buying of third currencies like the Pound Sterling and the Euro to convert to dollars for profit motives.
“Speculators are rearing their head in the parallel market and causing distortions on the established stable exchange rate.
“There is a growing demand of third currency like the pound and the euro by speculators for currency conversion trading,’’ the source said.
When contacted on the issue, Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria (ABCON) said the CBN was battle ready to defend the naira.
He noted that ABCON would continue to support the CBN to ensure that the already established rate stability was not distorted.
In his words, “ABCON, as a self regulatory operator’s mandate, is to ensure exchange rate stability and our members are guided by it and heavy penalty awaits any erring member,’’ Gwadabe said.
It should be noted that the high demand for the Pound and the Euro has pushed the rates above the N500 and N400 mark.
The Naira has sustained its stability at the parallel market exchanging between N360 and N364 at the parallel market.
The CBN has continued to intervene in the foreign exchange market in the defence of the naira.