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N507/$: BDC urges members to help stabilizes naira

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8 years ago

February 15, 2017

Olu Emmanuel

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By Odunewu Segun

Association of Bureau De Change Operators of Nigeria has urges its members to help stabilize the naira which was earlier today quoted at N507 to N510 per dollar on the black market, National Daily has gathered.

The continued weakness of the naira has become a major concern for the Central Bank of Nigeria, even creating frictions between the apex bank and BDC operators, National Daily has gathered.

According to the President of the group, Aminu Gwadebe, the growing spikes in the parallel market to over 500/$ is becoming a major concern to the central bank and detrimental to the cordial relationship existing between ABCON and regulators.

The central bank normally sells around $8,000 a week each to some 3,000 licensed retail operators, who resell to individuals and small businesses for a marginal profit.

On the official interbank market on Wednesday, lenders traded only $1.95 million by the market close as the central bank, the main supplier of dollars, continued to ration the U.S. currency.

While these operators account for less than 5 percent of all foreign currency trading in Nigeria, they help drive the currency’s exchange rate due to the scarcity of dollars on the official channel.

However, they have tended to buy dollars from private sources and resell at a much higher margin, fuelling the black market but weakening the naira.

Gwadabe urged his members to stick to the reference rate of 399 naira per dollar set last month to stabilise the currency market and reduce the 40 percent gap with the official interbank rate.

Gwadabe told his members to comply with the reference rate to enable them to benefit from “more volumes soon to be communicated by the central bank”.

The naira’s official exchange rate weakened by a third last year, and the currency has continued to hit fresh lows on the black market since last week, crossing the 500 line on the unapproved retail market as traders tested new levels to lure dollar holders to sell.