The Central Bank of Nigeria (CBN) may lose the battle in defense of the Naira if the growing demand for the Pound Sterling and the Euro by speculators was not checked, the News Agency of Nigeria (NAN) reports.
A credible source at the foreign exchange market told NAN that the excessive demand for the Sterling and the Euro by speculators for currency trading conversion may cause distortions on the established stable exchange rate.
NAN reports that foreign currency trading is 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 pounds and the Euro by speculators for currency conversion trading,’’ the source said.
When contacted on the issue, Alhaji Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria (ABCON) said the CBN was battle ready to defend the naira.
Gwadabe noted that ABCON would continue to support the CBN to ensure that the already established rate stability was not distorted.
“ 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.
NAN reports that the high demand for the Pounds 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 defense of the naira. (NAN)