Hello! Happy new week. Did you enjoy your weekend? Yeah, over the weekend, Nairemetrics spoke with Association of Bureau De Change Operators of Nigeria (ABCON) President Aminu Gwadebe during an exclusive chat where he admitted that the foreign exchange (forex) market is facing some challenges. Gwadebe said "the Naira, unfortunately, is suffering an inconsistent journey bedeviled by all kinds of wars ranging from Trade war, rate war and speculative attack and therefore becoming the most unpredictable currency in the world."
He explained that the money exchange market (forex) is facing some big problems. He said that when big countries like the US, Europe, and China have weak economies, people trade less, making the market shaky. Also, new rules for money traders mean they have to spend more to follow the rules, making it harder for them to do business. Technology is changing fast, and that also affects how money is traded, he noted. All these things together make the market more unstable, with less money available and higher costs for trading.
| Date | Exchange-Rates.org (1 USD = NGN) | ExchangeRates.org.uk (1 USD = NGN) |
|---|---|---|
| March 17, 2025 | 1,536.44 | 1,540 |
| March 19, 2025 | 1,536.21 | 1,537 |
This table shows how unpredictable naira can be in the past seven days.
In a nutshell, Mr. Gwadebe highlights factors including global economic uncertainty, regulatory changes such as recapitalization, technological advancement such as the rise of electronic communication networks (ECNs), growing usages of artificial intelligence (AI,) and machine learning (ML), and the adoption of automated trading systems which of course have have increased market efficiency but also introduced new risks, such as flash crashes and market manipulation, and market volatility which is increasing geopolitical tensions, such as the growing mistrust in Global interactions that most time leads to market volatility and fluctuations in currency values are the major challenges affecting the forex market in Nigeria.
Also Read: What Stagflation means in Nigeria and how to solve the economy crises.
However, to fix the problems in the Nigeria's forex market, Mr Gwadebe suggested some smart steps. He said the government should make sure banks have more money to lend, set one fair exchange rate for everyone, and share clear information about the market so people understand it better. He also said that small money traders (BDCs) should be allowed to work directly with international money transfer companies, and Nigeria should save more money in its reserves to keep the naira stable.
In a nutshell, Mr Gwadebe suggests that government and authorities should unify exchange rates, increase transparency and communication about the forex market, develop a deep and liquid foreign exchange market by making BDCs direct agents of IMTSO, and increase Nigeria’s external reserves.
However, it's important to note that the CBN has already taken a step to make money exchange fairer by announcing the removal of all restrictions on foreign exchange rates and adopting a “willing buyer, willing seller” arrangement. This means everyone will use the same exchange rate, making things more stable and less shaky. The move is aimed at creating a single, unified exchange rate, which can help reduce volatility.
Banks have already started limiting how much foreign money (e.g., USD, EUR, and GBP) people can take out, and they are working with the government to keep the market steady. To handle these challenges, people trading money should stay updated on market changes, work together, and follow new rules. They should also use smart strategies to avoid losses and stay strong in the business.
Furthermore, reports say BDC operators attributed the lost of naira value to many people wanted to buy foreign money after the government made some contractual payments. Mr Gwadebe agreed that the market is facing unusual problems and said this shows why the government must always follow its plans to keep things stable. He also said these problems are not real or permanent—they come and go like a bubble that will eventually burst.
