Demand For Euro, Pound Sterling Threatens Exchange Rate Stability

The Central Bank of Nigeria (CBN) may lose the battle in defence of the Naira if the growing demand for the Pound Sterling and the Euro by speculators is not checked, our correspondent reports.
A credible source at the foreign exchange market told our source 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.
Our correspondent 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, the President, Association of Bureau De Change Operators of Nigeria (ABCON) Alhaji Aminu Gwadabe, 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.
Our correspondent reports that the high demand for the Pounds and the Euro has pushed the rates above the N500 and N400 mark.