FX sales: BDCs seek review as official rate crashes against black market

The Association of Bureaux De Change Operators of Nigeria (ABCON), the umbrella body of all Central Bank of Nigeria (CBN)-licenced Bureaux De Change (BDCs), at the weekend, urged the apex bank to adjust and lower its applicable exchange rate downwards below the N1,251/$ it pegged for them. This followed the recovery of the naira which […]

The Association of Bureaux De Change Operators of Nigeria (ABCON), the umbrella body of all Central Bank of Nigeria (CBN)-licenced Bureaux De Change (BDCs), at the weekend, urged the apex bank to adjust and lower its applicable exchange rate downwards below the N1,251/$ it pegged for them.

This followed the recovery of the naira which made the official rate to be lower than the parallel market rate for the first time in 15 years.

Daily Trust reports that the CBN penultimate week sold dollars to BDCs at N1,251/$, but since then the local currency has regained its strength, exchanging currently lower than the price being sold to BDCs.

Checks on the Nigerian Autonomous Foreign Exchange Market (NAFEM) Sunday indicated that a dollar closed at N1,251.05 at the close of work on Friday, which is the same price the CBN is selling to BDCs.

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Also, some unregistered BDC operators in Lagos were buying a dollar at around N1,200 as of Saturday.

This was why ABCON insisted that the naira’s speedy recovery, which was faster than expected, had made CBN’s selling rate to BDCs very expensive and difficult to offload to retail buyers that were trooping to the undocumented forex operators for cheaper rates and avoiding the BDCs’ services.

The association, in a letter by its National President, Alhaji (Dr) Aminu Gwadabe, addressed to the CBN’s Director, Trade and Exchange, lamented that many BDCs which funded their accounts for dollar allocation were yet to receive their allocation of dollars to meet up with the legitimate critical demands of their clients.

ABCON insisted that with the naira appreciating across markets, many BDCs which bought a dollar at N1,251/$ would lose significant incomes and capital if they sold at the current open market rate of N1,235/$.

It added that, “Consequently, many of our members are jittery to bid/collect their bids for fear of losing money as the current market reality has the potential to force us to sell below cost price and antithetical to recent market price discovery.”