Recovery of Naira Spurs Price Decrease: ABCON Applauds Policy Shift
The Association of Bureaux de Change Operators of Nigeria (ABCON) has emphasized that the resurgence of the naira has led to a noticeable reduction in the costs of goods and services across the nation.
In a statement issued by Aminu Gwadebe, the president of ABCON, on Saturday, he commended the Central Bank of Nigeria (CBN) for permitting Bureaux de Change to participate in the foreign currency market, citing it as a pivotal factor in the naira’s recovery.
The CBN had prohibited BDC operations in July 2001 as part of efforts to stabilize the local currency.
ABCON had been advocating for BDCs to operate formally in the currency market, and in February, the apex bank reinstated them in the official forex market.
Gwadabe highlighted that alongside monetary policy tightening, which resulted in interest rate hikes and increased investment in government instruments, and the clearance of forex backlog forward commitments, the return of BDCs notably enhanced dollar liquidity at the retail end of the forex market.
He noted, “The current trend in the foreign exchange market is curbing inflation as the prices of essential commodities are gradually decreasing. Moreover, it instills confidence in the local currency, reducing currency substitution practices that previously strained our local currency.”
With the naira’s resurgence, Gwadabe observed a significant drop in international school fees by 15%, a 20% reduction in medical tourism costs, and a 25% decrease in airfare for both local and international trips.
The president of ABCON asserted that a stable naira would attract more foreign portfolio inflows to the economy, acknowledging the efforts of the CBN, under the leadership of Governor Dr. Olayemi Cardoso, in recognizing the significance of BDCs in maintaining stable exchange rates.
Moreover, Gwadabe emphasized the cessation of previous practices where Nigerians in Dubai brought dollars back home for sale at high rates following the rapid recovery of the naira against the American dollar.
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