A collaboration between the Central Bank of Nigeria (CBN) and the Association of Bureaux De Change Operators of Nigeria (ABCON) will save Nigeria’s forex market which has been trailed by multiple exchange rate practices causing market instability.
Bureaux De Change Operators are small retail end institutions licensed to carry on the business of selling Personal Travel Allowance (PTA), Business Travel Allowance (BTA), school fees, and medical bills payment abroad among other roles at the criteria retail end of the foreign exchange market.
At the time of filing this report (12.30 pm), Babangida, Bureaux De Change Operator (Black Market) at Ajao Estate told TechEconomy on a telephone call that $1 was trading at N600, which is contrary to some reports that say one dollar was exchanging at over N600.
The observation is that different players in the black market were exchanging at different rates ($1/N610, $1/605, etc.), while the official exchange rate stood at $1/415.13.
In addition, the various policies of the CBN on the operation of the sub-sector continue to be inhibitive and limit BDCs’ from providing their constitutional roles in the forex market and economy.
It was on this note that, Alhaji Aminu Gwadabe, President, Association of Bureaux De Change Operators of Nigeria (ABCON), is calling on the financial regulator to collaborate and end the market instability.
Gwadabe called on the CBN to implement market-friendly policies that will make the BDCs impact more positively on the market and promote exchange rate stability in the economy.
According to him, the hasty generalization that criminalizes the BDC sub-sector as responsible for all market crises and infractions like selling dollars with higher premium above regulatory limit, promoting the loss of confidence in the near, and multiplicity of the exchange rates was certainly not in the best interest of the market and economy.
He said: “It is in view of this disturbing situation and the need to strengthen BDCs value chain as obtainable in organized climes that we urge the regulators and policymakers to consider BDCs as the most potent tool in liberalizing the foreign exchange market and stopping multiples exchange rates in the system.”
He explained that the BDCs have since 2006, provided policymakers with a window to achieve their mandate of exchange rate stability and price equilibrium.
He, therefore, called for the reintegration of the BDCs into the forex market ecosystem to sustain their roles in the economy, adding that the BDCs have for years remained effective and creative in contributing to the forex market.
“For instance, the introduction of the Investors & Exports (I&E) FX window in 2017 resulted from agitations from stakeholders like ABCON, foreign investors, and Nigerians in Diaspora who advocated for it to allow more dollars inflows to the economy.”