The Association of Bureaux De Change Operators of Nigeria (ABCON) – the umbrella body of all licensed Bureaux De Change (BDCs) – has appealed to the Central Bank of Nigeria (CBN) to adjust its applicable exchange rate downward to below the N1,251/$1 it pegged for the BDCs.
The request followed the epoch history making achieved by the apex bank for the first time in the last 15 years where the unofficial market rates printed at N1,235/$1.
In view of this, they want a new rate that is lower than the official BDCs applicable buying exchange rate of N1,251/$1 (plus 1.5 per cent margin) set for the BDCs by the CBN in its latest tranche of intervention.
The group insisted that Naira’s speedy recovery, which was faster than expected had made CBN’s selling rate to BDCs very expensive and difficult to offload to retail end buyers that are trooping to the undocumented forex operators for cheaper rates and avoiding the BDCs services.
In a letter to CBN the director, trade and exchange department, signed by Aminu Gwadabe, ABCON national president, the association further expressed concerns that many BDCs who funded their accounts for dollar allocations are yet to receive their allocation of dollars to meet up the legitimate critical demand of their clients due to scrutinization of the BDCs documents for collections at the various designated centers which invariably made the BDCs vulnerable to exchange rate risk and significant loses.
The group insisted that with the Naira appreciating across markets, many BDCs who bought dollar at N1,251/$1 will lose significant income and capital if they sell at the current open market rate of N1,235/$1 and therefore the need for the call for a further review downward of the applicable exchange rate for the period and subsequently to continue to enhance naira sovereignty.
“We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$1 with a margin of 1.5 percent are yet to receive their disbursement. This is happening in the face of prevailing open market rate of N1,235/$1, which is lower than the authorised applicable exchange rate by the CBN to the BDCs,” the statement said.
Despite this development, ABCON lauded the CBN leadership for the recall of BDCs into the official FX window and steps taken by the apex bank to strengthen the naira against the dollar and other global currencies.
ABCON said the positive fallout of the CBN’s efforts to restore naira’s glory came faster than expected, reiterating its commitment to working with the apex bank to realise the objectives of the government towards exchange rate stability and economic growth.
ABCON states that their forecasts in the ongoing market development indicates a willingness of the market to correct itself with a realistic price discovery as naira is forecast to continue to appreciate further across market with the increasing sources of foreign exchange inflows aided by the CBN policies
* Media Report