By Dipo Olowookere
This is surely not the best of times for currency speculators, as their bets on the Naira against the Dollar are getting their fingers burned too fast, and they seem helpless at the moment because of the recent actions of the Central Bank of Nigeria (CBN), led by Mr Yemi Cardoso.
At the parallel market on Tuesday, the value of the Nigerian Naira further strengthened against the United States Dollar by N10 to N1,210/$1 compared with Monday’s value of N1,220/$1.
A few of the Bureaux De Change (BDC) operators who spoke with Business Post disclosed that since the latest directive of the central bank on the use of foreign currency as collateral for Naira-denominated loans and others, there has been an influx of foreign exchange (FX) into the black market.
One of the forex traders at the Olugbede Model Market in the Egbeda, Alimosho area of Lagos State, Mr Adamu Abdulahi, told this newspaper that those who bought Dollars at N1,800 with the hope that they could sell above N2,000/$1 later are stuck at the moment.
“Some of those who bought Dollars when they were high are regretting their actions because of the huge loss they have already incurred.
“To be sincere with you, most of us are scared to buy the Dollars back from them because we do not know what might happen tomorrow.
“With the way things are going, the Dollar may crash below N1,000 in the coming weeks, and nobody is ready to risk keeping the Dollar at the moment. That is why some of us have begun to diversify into the sale of gold,” he told Business Post.
Another trader at the popular Alade Market in the Ikeja area of the metropolis, who identified himself as Mr Sani, said the business (FX trading) is becoming too risky at the moment because of the policies of the CBN.
However, he welcomed the resumption of forex sales to BDCs by the central bank, saying this is the best way to stabilise the market and possibly crash the Dollar and make the Naira stronger again.
“If you notice, the Naira started to regain its consciousness after the CBN brought us back into the system. We warned the previous CBN Governor (Mr Godwin Emefiele) when he took us out.
“I am happy this current governor listened to the voice of reasoning because BDC operators are vital stakeholders in the FX market; sidelining us can be dangerous,” he said.
Mr Sani projected that the Naira will continue to gain in the parallel market as long as the central bank maintains this momentum, saying those that will lose are the forex hoarders, who he advised to cut down their losses and release their Dollars before it is too late.
Modupe Gbadeyanka