Financial analysts have called on the Central Bank of Nigeria to come up with foreign exchange policy that will help to narrow down the wide gap between official and unofficial exchange rates in the forex market.
They explained that shortages in forex supply , which resulted into forex scarcity gives speculators more opportunity to continue with their forex speculation.
They pointed out that the large gap between the exchange rates in the Forex market is predominantly fuelled by the inadequate foreign exchange supply, which results in international transactions being channelled to unofficial markets.
This according to them has made round-tripping or arbitrage in the forex market very lucrative as the returns are attractive.
A financial analyst, Mr Ifeanyi Okolo who described foreign exchange round-tripping or arbitrage as a process whereby funds are obtained from the official forex market at lower rates and diverted to other markets and sold at a higher rate by forex dealing banks and users said that some forex speculators can get foreign exchange from the interbank market under the guise of legitimate use for personal travel allowance (PTA)), and sell at the parallel market, thereby taking advantage of the wide margin.
He said that the increase in speculation at the parrellel segment of forex market has forced importers with due obligations to scramble for hard currency in unofficial sources while most of the liquidity providers (foreign investors) have exited in favour of safe investment options.
