The Association of Bureau De Change Operators of Nigeria (ABCON) has appealed to the Central Bank of Nigeria (CBN) to adjust and lower its applicable exchange rate downward below the N1,251/$ it pegged for the Bureau De Change (BDC) operators, as it has become expensive.
The request by the BDCs comes after a development where for the first time in 15 years, the parallel market rate of N1,235/$ is lower than the official rate of N1252/$, which is the applicable buying exchange rate for the BDCs.
The appeal was made known in a letter signed by the ABCON President, Aminu Gwadabe, to the Director, Trade and Exchange Department of the CBN.
The BDC association said the naira’s speedy recovery, which was faster than expected, had made CBN’s selling rate to BDCs very expensive and difficult to offload to retail end buyers that go to the undocumented forex operators for cheaper rates.
ABCON said that many BDCs who funded their accounts for dollar allocations are yet to receive their allocation of dollars to meet the legitimate critical demand of their clients due to the scrutinization of the BDCs’ documents for collection at the various designated Centers which invariably made the BDCs vulnerable to exchange rate risk and significant losses.
The association insisted that with the naira appreciating across markets, many BDCs who bought dollars at N1,251/$ will lose significant income and capital if they sell at the current open market rate of N1,235/$. It, therefore, highlighted the need for the call for a further review downward of the applicable exchange rate for the period and subsequently to continue to enhance naira sovereignty.
The statement partly reads;
“We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$ with a margin of 1.5% are yet to receive their disbursement. This is happening in the face of the prevailing open market rate of N1,235/$ which is lower than the authorized applicable exchange rate by the CBN to the BDCs.’’
“It is in view of the above market developments that we write to appeal to your good selves for a readjustment and review downwards of our funding rate of the last tranche (2nd bidding) from N1,251/$ further down to reflect the current market rate discovery. This became imperative as it is only the consideration of the readjustment downward that will enable our members to upload their holding positions.’’
“Consequently, many of our members are jittery to bid/collect their bid 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.’’
