Naira remains steady as BDC operators advise CBN on convergence

The Association of Bureaux De Change Operators of Nigeria (ABCON) on Wednesday listed recipes for a stronger naira and a more stable exchange rate in 2018.

Alhaji Aminu Gwadabe, President of ABCON, said the recipes were agreed at a meeting of the operators in Lagos. He urged the CBN to ensure the convergence of deposit money banks rate and that of the BDCs, for a healthy competition that would achieve a stronger naira.

He also called for the deepening of the BDC’s scope of operations by allowing them to transact on SME remittances. According to him, allowing the BDCs to remit upkeep and accommodation fees for Nigerian students abroad will help to mitigate parents’ problems in sourcing the dollar.

He appealed to the CBN to allow the BDCs to have access to the investors/exporters window and to also make BDC operators direct agents of the International Money Transfer Organisations like it was done in other advanced economies.

Other recipes listed by the group included the exemption of BDC transactions from VAT payments as observed in the UK and the U.S. and the reduction of complex documentation requirements on BDC transactions.

He noted that constant collaboration with self-regulatory organisations like ABCON, as recommended by an article of the Financial Action Task Force (FATF), were important for the nation’s foreign exchange market.

Gwadabe urged the CBN to remove or reduce to the barest minimum bank charges on BDC operations and a review of the annual license renewal of the BDCs, in view of their numerical strength.

Meanwhile, the Naira was sold at N361.5 to the Dollar at the parallel while the Pound Sterling and Euro were sold at N475 and N420 respectively on Tuesday.

At the Bureau De Change (BDC) window, the Naira traded at N362 to the Dollar, slightly lower than the parallel market rate, while the Pound Sterling and the Euro closed at N475 and N420.

Trading at the investor’s window saw the Naira closed at N359.38 to the dollar. Traders at the market said they expected the Naira to appreciate further in the weeks ahead.