The Association of Bureau De Change Operators of Nigeria (ABCON) has asked the Central Bank of Nigeria (CBN) to allow BDCs to carry out online dollar operations and Point of Sale (POS) agency as part of measures to boost liquidity in the forex market and ensure exchange rate liquidity.
This was made known in a statement issued by the President of ABCON, Aminu Gwadebe, where he noted that full participation of BDCs in the retail segment of the foreign exchange market will help achieve a stable, strong, and virile exchange rate.
Gwadabe said that ABCON recommended that the apex bank should approve its overdue request that BDCs be made agents through which over $20 billion annual inflows from the diaspora enter the economy. He noted that securing such regulatory approval will boost dollar liquidity and strengthen the naira.
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He said, “We at ABCON advise that BDCs should be allowed to access dollars or diaspora remittances through the autonomous forex windows like allowing operators to receive IMTOs proceeds, carrying out online dollar operations and Point of Sale (PoS) Agency, among others.’’
Gwadabe said the Diaspora remittances remain a low hanging fruit for the apex bank and tapping the full potentials would require creating multiple channels of inflows to make it easier for Nigerians in diaspora to send funds home.
Presenting a pathway to stable exchange, Gwadabe said Nigeria under the current leadership at the CBN, has all it takes to achieve a strong and stable exchange rate and build a highly liquid forex market that supports the domestic economy.
He said the challenges confronting the nation’s forex market and depreciation of the naira require all hands to be on deck, and the BDCs, which are licensed to play at the retail end of the forex market, should be fully involved in providing lasting solutions to the ongoing volatility in the exchange rate.
Gwadabe said the continuous depreciation of the naira in both official and parallel markets does not benefit the BDCs and the domestic economy, hence steps should be taken to reverse the trend and strengthen the local currency for maximum impact on the economy.
The naira on Tuesday crossed N1,100 to dollar mark at the parallel market even as it continues to weaken considerably at the official market due to persistent dollar scarcity and speculative activities of illegal forex dealers.
He said the several measures by the apex bank to bridge exchange rate gaps showed genuine intentions of the regulator to entrench exchange rate stability, but getting the BDCs involved in the solution recipe will bring the desired results of not only a highly liquid market, but stable rates.
Gwadabe said that like every other segment of the market, the illiquidity in the market remains a major concern to the BDC sector.
He said aside illiquidity in the market, the ABCON is not happy with the unlicensed forex dealers who are at the centre of speculative activities, and attracting negative image to the sub-sector.
He said ABCON can only continue to educate the general public against patronizing the illegal forex dealers because the suspension of the Self-Regulatory Organization status of ABCON makes it difficult for the group to directly sanction the illegal operators.
He said enforcement of regulatory sanctions against non-compliance with guidelines are expected to be prompt and stiff against erring members as a deterrent to others.