CBN, ABCON finalize arrangement on forex resumption

The Central Bank of Nigeria (CBN) and the Association of Bureau De Change Operators of Nigeria (ABCON) have finalized arrangements for the resumption of forex sales to Bureau De Change operators (BDCs).

Recall that the naira has recently been facing major challenges, no thanks to the COVID-19 pandemic. Unfortunately, currency speculators took advantage of the situation by making spurious demand for dollars with the hopes of making good returns from the rising gaps between official and parallel market rates.

Meanwhile, Governor Godwin Emefiele of the CBN and ABCON President, Aminu Gwadabe, have repeatedly spoken against the illicit business of currency speculators and the dangers they pose to the economy and naira’s stability.

They have also warned the speculators about the looming danger for their trade if they refuse to retrace their steps; they could incur losses estimated at over N10 billion in the next few months, especially now that the CBN is enabling BDCs’ full return to the forex market after nearly six weeks of inactivity.

Both Emefiele and Gwadabe have extensive experience in the market, enough to predict what follows after every major crisis. During the 2016 currency crisis, the market got a major relief after the BDCs began getting dollar allocations from the CBN. That same scenario will soon play out as the BDCs countdown to resumption.

The BDC operators have, for decades, proven their relevance in stabilizing the naira. While commenting on the recent moves by the apex bank to resume dollar sales to the BDCs.

“The return of over 5,000 BDCs to the forex market will add great strength to the Naira and lead to major capital losses for forex speculators. It happened in 2016 and it will happen again in 2020. The return of the BDCs will immediately boost naira’s recovery and put the enemies of the economy to shame. We are committed to the CBN’s exchange rate stability and will take all necessary steps within set rules and regulations to keep the naira stable.”

Naira crashes further at the parallel market due to dollar scarcity, lowest since 2017, Naira drops to N454, foreign investors and importers struggle for dollars, Naira set for recovery as ABCON issues guideline to members for forex sales resumption

For Gwadabe, the naira rate review and the CBN’s assurance to foreign investors on the easy repatriation of their funds from Nigeria, are positive indicators for naira’s continued recovery.

He also noted that ABCON is reopening guidelines to all its members nationwide included on-boarding of the queuing crowd ticketing management application, known as ABCON 360°QSM portal, by all members. So far, over 80 percent of members registered nationwide.