Rising inflation: Bureau De Change urges swift action on CBN’s export, food resolutions

The Association of Bureau De Change Operators of Nigeria (ABCON) has called for the immediate implementation of resolutions by the Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN).

Its president, Alhaji Aminu Gwadabe, made the call in an interview with the newsmen on Wednesday in Lagos.

Gwadabe also called on the government to focus on export initiatives amid the escalating inflation rates while urgently implementing measures discussed at the MPC held in Abuja on Tuesday.

The MPC’s decision to increase the benchmark interest rate by 200 basis points to 24.75 percent was motivated by the alarming inflation rate, which stood at 31.70 percent in February, according to CBN Governor Yemi Cardoso.

Gwadabe suggested collaboration among export-related agencies to provide support and innovative strategies to exploit the potential in sectors such as agribusiness, solid minerals, IT, the arts, and music.

The ABCON boss commended the MPC’s recommendation for the government to release food stocks from its silos to alleviate inflationary pressures on food prices, urging swift action on this front.

Gwadabe highlighted the importance of a paradigm shift in dollar supply within the economy, proposing the de-risking of non-oil export products through bonds and guarantees.

Regarding the CBN's monetary measures, Gwadabe stressed the balanced approach of tightening naira liquidity through the hike in the Monetary Policy Rate (MRR) and Cash Reserve Ratio (CRR).

This, he said, should be done while simultaneously attracting dollar liquidity through high-interest-rate bonds.

He explained the organic and inorganic aspects of liquidity injection, emphasising the importance of maintaining policy measures to stabilise the market in the medium to long term.

Gwadabe emphasised the role of Bureau de Change operators in moderating market volatility and urged the CBN to continue engaging them as partners.

“The BDCs will continue to be the most effective transmission mechanism of the apex bank foreign exchange policy.

“The BDCs, despite the generalisation of stigmatisation and crudeness of different sectors in the economy, remained the most effective and foot soldiers of the apex bank in checkmating volatility and spikes in the markets.

“Our periods of effectiveness started in 2006, 2009, 2017, and now in 2024,” he said.

The ABCON president called on all his members to continue to play within the rules to earn public trust and that of the regulators.

“Finally, my concluding view is to continue to stem hoarding and speculation in the financial market. The CBN should play with liquidity more than the cash reserve requirement.

“For instance, when Tanzania wanted to discourage speculative and hoarding behaviour, they raised their liquidity ratio to 40 percent.

“This resulted in many financial institutions selling off their dollar positions in the market to meet regulatory requirements,” he said.