The Association of Bureaux De Change Operators of Nigeria (ABCON) has called on the Central Bank of Nigeria (CBN) to reconsider and decrease its applicable exchange rate, currently set at N1,251/$, citing concerns over growing disparities in the forex market.
In a letter addressed to the Director of the CBN’s Trade & Exchange Department, ABCON National President, Aminu Gwadabe, emphasized the need for a downward adjustment in the exchange rate to align with prevailing market rates. Gwadabe highlighted the challenges faced by BDC operators, particularly regarding the difficulty in offloading forex to retail buyers due to the high selling rate set by the CBN.
The letter underscored the discrepancy between the CBN’s selling rate to BDCs and the lower parallel market rate, which stands at 1,235/$. This disparity has led to operational difficulties for BDCs, jeopardizing their ability to meet the legitimate forex demands of their clients and exposing them to exchange rate risks and potential losses.
ABCON expressed appreciation for the CBN’s efforts to bolster the naira’s value against major currencies but urged for a prompt review of the funding rate to reflect current market dynamics. Gwadabe reiterated ABCON’s commitment to collaborating with the CBN to achieve exchange rate stability and foster economic growth.
Moreover, ABCON proposed enhancements to the payment process at disbursement centers, advocating for medium-term automation to facilitate timely payments and ensure effective administration and control of transactions. The association suggested implementing a cut-off time for payments and bid collections to streamline the bidding process and instill confidence among BDC operators.
In conclusion, ABCON emphasized the urgency of addressing the exchange rate disparities, urging the CBN to take decisive action to restore confidence in the intervention measures and enhance BDC participation in the forex market.
The appeal from ABCON reflects the growing concerns within the BDC sector regarding the prevailing exchange rate regime and underscores the importance of aligning regulatory policies with market realities to sustain confidence and stability in the forex market.
