ABCON urges CBN to lower applicable exchange rate for members

The Association of Bureau De Change Operators of Nigeria (ABCON), says naira’s speedy recovery, which was faster than expected, had made Central Bank of Nigeria (CBN) 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 our services.

ABCON president, Aminu Gwadebe who disclosed this in a letter to CBN’s  Director, Trade and Exchange Department therefore urged the apex bank to adjust and lower its applicable exchange rate downward below the N1,251/$ it pegged for the Bureau De Change (BDC) operators.

The request by the BDCs is coming amid historic development where for the first time in 15 years, the parallel market rate of N1,235/$ is lower than the official rate of N1252/$, which is the applicable buying exchange rate for the BDCs.

ABCON further expressed concerns that many BDCs who funded their accounts for dollar allocations are yet to receive their allocation of dollars to meet the legitimate critical demand of their clients.

It lamented that this was due to the scrutinization of the BDCs’ documents for collection at the various designated Centers which invariably made the BDCs vulnerable to exchange rate risk and significant losses.

The association insisted that with the naira appreciating across markets, many BDCs who bought dollars at N1,251/$ will lose significant income and capital if they sell at the current open market rate of N1,235/$.

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It, therefore, highlighted 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.

The statement partly reads, “We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$ with a margin of 1.5 per cent are yet to receive their disbursement. This is happening in the face of the prevailing open market rate of N1,235/$ which is lower than the authorized applicable exchange rate by the CBN to the BDCs.’’

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 realize the objectives of the government towards exchange rate stability and economic growth.

ABCON states that their forecasts in the ongoing market development indicate a willingness of the market to correct itself with a realistic price discovery as naira is predicted to continue to appreciate further across all markets with the increasing sources of foreign exchange inflows aided by the CBN policies.