By Oludare Mayowa
The Nigerian naira rallied by 8.04 percent on the parallel market on Tuesday to N460 to the dollar compared with N500 a dollar the local currency peaked on Monday.
President of the Association of Bureau de change operators of Nigeria (ABCON), Aminu Gwadabe told Global Financial Digest that the new Central Bank of Nigeria (CBN) policy on diaspora remittances forced those who were hoarding dollars to sell into the market.
“The closing rate is N460/$ as new policy on proceeds of diaspora remittance muster illicit and frivolous financial transactions/demand in the market.
“We are witnessing a true market equilibrium and hoarding, speculation and attack on the local currency have been checkmated as result of the new policy,” Gwadabe said.
The Central Bank of Nigeria (CBN) on Monday said Nigerians receiving funds from their relatives abroad through money transfer operators such as Western Union and Moneygram now have the option of collecting such money either in local currency or foreign currency.
The CBN said in a circular on Monday that “beneficiaries of Diaspora remittances through International Money Transfer Operators (IMTOs) shall henceforth receive such inflows in foreign currency (US dollar) through the designated bank of their choice.”
“A lot of market monopoly will be disrupted and usher in more liquidity to help the local currency appreciates.
“As the economy head to a positive growth in the first quarter of 2021, I advise those hoarding and speculating on the local currency should sell now to avoid licking their wounds.
“The CBN intelligence gathering is effective and a continuous one to stabilise the naira,” Gwadabe said.
Though Aboki Fx, an online forex quote platform put the closing rate of the local currency at N495 to the dollar, insiders said the market traded far lower than the quote by the online platform put out.
Dealers said many of those who have hoarded hard currency in anticipation of further devaluation of the naira were disappointed by the marginal adjustment done by the CBN on Monday.
“Don’t forget too that the CBN policy change came a day the bank usually sell dollars to BDC, that means more liquidity came into the system this week” a market dealer said.
Dealers said more dollar inflows are expected ahead of Christmas from diaspora remittances as many Nigerians abroad would want to send money home to their relatives to enable them to celebrate the festive season.