CBN moves against dollar speculators, hoarders as naira depreciates

The Central Bank of Nigeria (CBN) has vowed to go after currency hoarders and speculators whose activities are affecting the appreciation of naira against the US dollar.

An authoritative source in the apex regulatory bank said the speculators and hoarders are sabotaging the government’s efforts towards stabilising the naira against the dollar.

Government’s efforts to stop the depreciation of the naira relative to major currencies received a significant boost in the last two weeks when the naira appreciated significantly.

Majority of Nigerians are, however, very happy about the appreciation and strengthening of the naira as many commended the federal government and CBN for doing a good job and the only unhappy Nigerians are speculators and hoarders who lost a lot of money.

However, from Wednesday, the naira began to depreciate. In the last two days, the rally has slowed down and naira has started depreciating again as speculators and hoarders fight back.

The government and the CBN’s positions have always been that the gap between the official and parallel market is artificially induced by speculation and hoarding.

Speaking, the source who craved anonymity because he’s not authorized to speak, said politically exposed persons that benefited from the FX roundtripping are currently fighting the system in other to have a depreciated naira.

“The federal government did an excellent job with the naira given its recent appreciation. Speculators and hoarders who are powerful Nigerians are pushing back and sabotaging government efforts. The government will go after them and deal with them decisively.”

“Based on the intelligence at my disposal, the CBN has concluded that the depreciation is due to a pushback by speculators and current traders,” the source stated.

According to the source, politically exposed persons who are benefitting from round tripping in the last administration are responsible for the renewed crash of naira.

“Now, the CBN is focused on launching a campaign against speculators and hoarders else, the gains against the naira will be eroded if nothing drastic is done.

“Powerful Nigerians who benefitted from roundtripping in the last administration are still involved in speculation now. They are used to easy money and government is ready to decisively move against them,” he stated.

Corroborating the CBN source, the Association of Bureau de Change Operators of Nigeria warned that the CBN was set to inflict pain on currency speculators.

President of ABCON, Aminu Gwadabe, said, “What is happening in the market and the continuous naira rebound are the manifestations of the CBN double-edged sword measures of dollar liquidity injection and naira mopping through the instrumentality of interest rates hikes.

“It is a good development as it is (now) a great risk to speculate, hoard and substitute naira for other currencies,” Gwadabe declared.

“As we continue to observe developments, there is the need for caution in attacking the naira, as it all appears that the CBN has got the arsenal and the logic to continue to enshrine the success recorded,” ABCON noted.

The association noted there had been “Panic selling as against panic buying.”

The BDC operators called on the apex bank to continue to make clarifications and implement some of their recommendations to include them in the foreign exchange market.