BDCs seek return to mainstream FX business as naira nears N600/$
Our inclusion will stabilise market, ABCON insists
Eight months after the Central Bank of Nigeria (CBN) stopped funding Bureaux de Change (BDCs) operations, the Association of Bureaux de Change Operators of Nigeria (ABCON) is seeking the return of its members to mainstream foreign exchange (FX) business.
The umbrella body is soliciting the reversal of the CBN’s decision to boost its efficiency in servicing the retail end of the market.
The plea comes as the dollar consolidates around N590/$ after it broke the N580/$ resistance two weeks ago. N580/$ had remained a ceiling for the third quarter of last year.
In a notice distributed to its members nationwide, ABCON National Executive Council (NEC) appealed to the regulator to revisit the stoppage of dollar sales to BDCs as part of its search for solutions to the volatility of the market.
It faulted the claims that naira has remained largely stable following the stoppage of FX allocation to its members, arguing its operation is part of the stabilisation mechanism the market needs.
According to the NEC, BDCs remain the most potent tool the CBN was leveraging to achieve its foreign exchange rate management at the retail market level.
“Our position to CBN is that our members should be considered in whatever mechanism of dollar supply to the end-users as it is done in other countries instead of a total blanket removal from the market.
“We, therefore, reject the statements claiming that the naira exchange rate has improved following stoppage of dollar sales to BDCs and urge our members to ignore those pronouncements,” it stated in the notice.
The group said it would continue to take steps towards ensuring that the businesses of its members are restored and that they continue their legitimate operations as obtained in other parts of the world.
“We are not sleeping in our responsibility to ensure that our members’ businesses are sustained. We, therefore, call on all our members to continue to ignore statements against the BDCs and continue to give us the necessary support in ensuring that normalcy is restored to the market,” the statement said.
It added that the ABCON management would continue in its collaboration, lobbying, campaign and stakeholders’ engagements to ensure that BDC operators are given the right support and an opportunity to thrive like their counterparts in other parts of the world.
ABCON NEC said BDCs are not responsible for naira volatility and that they have contributed to stabilising the market. It added: “The naira now exchanges at N416.25/$ at the official market. However, at the parallel market, where the majority of forex is sourced by manufacturers while it exchanges at N587/$ at the retail end. That represents over N170 premium between both markets
“It is on records that the stoppage of FX sales to BDCs did not only create higher demand pressure but also made the value of our national currency useless. It is also a reality that the majority of foreign exchange retail end-users cannot meet their demands from the preferred professional banks.”
It claimed that the inclusion of BDCs in dollar supply mechanisms would help to reduce the challenges faced by FX end-users and support market stability.