The Association of Bureau De Change Operators of Nigeria has attributed the recent appreciation of the Naira against the Dollar to the Central Bank of Nigeria’s “double-edged sword” measures of dollar liquidity injection and Naira mopping through interest rate hikes.

According to a statement by ABCON President Aminu Gwadabe on Sunday, the CBN’s measures are creating a situation where it is more risky to speculate, hoard, and substitute Naira for other currencies.

“What is happening in the market and the continues naira rebounds is the manifestation 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 a greater risk to speculate, hoard and substitute naira for other currencies,” Mr Gwadabe said.

Gwadabe, however, cautioned that speculators are interested in the sustainability of the Naira’s gains, and are arguing that it is currently due to panic selling rather than panic buying.

He urged the CBN to continue to provide clarifications and implement some of ABCON’s recommendations in order to ensure the long-term stability of the Naira at the foreign exchange market.

“The BDCs are necessary in the demand measures of the apex bank, transaction monitoring mechanism and clients utilisation with correcting and moderating potentials,” Gwadabe said.

Gwadabe also noted that Nigeria is experiencing increasing reserves due to increased demand for crude oil, its major export commodity. He attributed this to the US increasing inventories and the escalation of tensions in the Middle East.