Naira dips to lowest point as BDCs call for collaboration

The Naira has dipped to its lowest point, exchanging for N545/$ at the parallel market as the Association of Bureau De Change Operators of Nigeria (ABCON) has called on the Central Bank of Nigeria (CBN) to collaborate with then to fix the challenges that have arisen as a result of the regulator’s forex suspension policy.

Alhaji Aminu Gwadabe, the President of ABCON, told reporters in Lagos over the weekend that the policy’s execution had exacerbated Nigerians’ economic hardships.

ABCON, according to Alhaji Aminu, has contributed over N300 billion to the economy and employs over 40,000 people. Gwadabe believes that the CBN’s strategy will exacerbate the worrying unemployment situation if it is not corrected.

CBN did not engage ABCON before implementing the policy, according to Gwadabe, however, he said, “I am not exonerating my members from some of the allegations leveled against BDCs, but it is not possible to sanitise a problem with another problem.

READ ALSO: CBN denies plans to convert forex in domiciliary accounts to naira

“As it is now, $1 exchanges for over N500, which cannot be reversed in the short run. So, there is an urgent need for the CBN to go back to the drawing board, consult with the licensed BDC operators and together proffer solutions.”

The black (parallel) market accounted for less than 1% of FX transactions, according to the officials, and should never be utilized to decide Nigeria’s dollar exchange rate.

At the last Monetary Policy Committee (MPC) meeting on Tuesday, July 27, 2021, the Central Bank of Nigeria hit at the Bureau De Change (BDC) for illegal forex trading and stated that it will henceforth discontinue the sale of forex to the Bureau operators in Nigeria.

The CBN Governor, Godwin Emefiele, also announced a halt on the licensing of new Bureau De Change (BDC) operators and further processing of BDC applications for forex across the country.

The Central Bank of Nigeria (CBN) has stated categorically that it has no intention of converting forex in domiciliary accounts of bank customers to naira as a way of checking the shortage of US dollars in the country.

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This is following the CBN announcement of the discontinuation of the sale of forex to BDC operators in the country, citing unwholesome practices of the BDCs. The naira has since dipped to its lowest point and the BDC operators are calling for collaboration.

ABCON, according to Alhaji Aminu, has contributed over N300 billion to the economy and employs over 40,000 people. Gwadabe believes that the CBN’s strategy will exacerbate the worrying unemployment situation if it is not corrected.

CBN did not engage ABCON before implementing the policy, according to Gwadabe, however, he said, “I am not exonerating my members from some of the allegations levelled against BDCs, but it is not possible to sanitise a problem with another problem.

READ ALSO: Naira inches close to N550/$1, exchanges at N730/£1

“As it is now, $1 exchanges for over N500, which cannot be reversed in the short run. So, there is an urgent need for the CBN to go back to the drawing board, consult with the licensed BDC operators and together proffer solutions.”

There is no reason for anyone who needs dollars to go to the black market as long as the person needs dollars for legitimate purposes.

The Senior CBN official said “Anyone patronising the black market to buy dollars at such rates must be engaged in illegal business because he can get the same dollars from the banks, the CBN, investors and exporters’ window at much lesser rates.

“So, what is the reason they’re going to the black market? Let those going to black market illegally desist from doing so.

“Their banks will sell them dollars through any of the approved channels. If anyone is refused, he/she should come out openly to report the bank. We will deal with the bank.

At the last Monetary Policy Committee (MPC) meeting on Tuesday, July 27, 2021, the Central Bank of Nigeria hit at the Bureau De Change (BDC) for illegal forex trading and stated that it will henceforth discontinue the sale of forex to the Bureau operators in Nigeria.