By Babajide Komolafe
Association of Bureaux De Change Operators of Nigeria, ABCON, has expressed confidence that the naira would bounce back and recover from the recent depreciation even as the nation’s currency gained 20 kobo on Wednesday.
After weeks of persistent depreciation, the naira appreciated against the dollar at the official market and interbank market. At the official market on Wednesday, the naira gained 20 kobo as the official exchange rate dropped to N149.85 from N150.05 on Monday.
At the interbank market, the exchange rate dropped to N154.605 from N154.8025 per dollar on Thursday.
Commenting on this development, ABCON President, Dr. Emmanuel Balogun, said that while the Association had been worried over the rapid depreciation of the Naira in the last eight weeks, it was however confident that the Naira would recover against the major currencies.
He said that the recent persistent slide in the fortunes of the naira was due to demand, much due to imports for end-of-year sales, which is expected at this period of the year, and speculation over the fate of the naira.
He said though some believe that with the continued depletion of the nation’s external reserves, the apex bank might not be able to maintain the N150 per dollar exchange rate benchmark for the budget, ABCON however believes that the decline in external reserve does not justify the recent rapid depreciation of the naira especially in the last two months.
He was of the opinion that the apex bank need to assure market operators and end_users that it would continue meet demand, genuine demand as this would calm the market and curtail speculation. He said on its part ABCON has put in place monitoring measures to ensure non of its members engage in any act that can aggravate the depreciation of the naira.
He however said that the long term measure to stabilising the exchange rate of the naira is provision of efficient infrastructure which would help reduce importation and hence reduce foreign exchange demand. He said for example fixing the nation’s refinaries and building new ones, with one in each of the six geopolitical zone will eliminate importation of petrol and save the nation a lot of foreign exchange.
He said an effective and efficient manufacturing sector will also curtail importation of finished goods and hence reduce foreign exchange demand. He therefore advocated the setting up of a task force and aggressive deployment of resources to address these critical areas.