The Association of Bureaux de Change operators of Nigeria has said that the unification of exchange rate in Nigeria will boost investor’s confidence.
President, ABCON, Alhaji Aminu Gwadabe, said the impact of the rate unification is massive, including raising foreign investors’ confidence in the domestic economy, boosting the foreign exchange reserves position and creating opportunity for a better foreign reserve management by the Central Bank of Nigeria.
Gwadabe assured that the BDCs would continue to meet the critical forex needs of the retail end-users and stick to allowable transactions limits as approved by the regulator’s authority.
He, however, explained that the BDCs have so far stamped their role as key players in the forex market, where they remain major economic drivers creating employment and wealth for the people.
These contributions, he said, “require that the operations of BDCs be supported to sustain ongoing market rally and stability. We commend the CBN’s bold move in unifying the BDCs’ banks’ rates.
“We can safely say that the threat of distortions of market rate by election anxiety have been mitigated by the policy. And the BDCs are committed to supporting the CBN’s policy direction and actions to sustain ongoing market stability.”
According to Gwadabe, the BDCs have over the years, remained a potent monetary policy tool for exchange rate stability. They have helped the government in creating over 30,000 jobs for Nigerians, thereby reducing the unemployment rate in the country.
The BDCs have continued and will continue to make forex available to the critical retail end-users, thereby deepening forex access in the country.
Recently, the CBN moved closer to realising its single exchange rate target by unifying the dollar buying rates for banks and Bureau de Change operators.
The development has brought stability to the foreign exchange market and showed CBN’s proactive approach to ending multiple exchange rates tipped to permanently send currency speculators out of the market.
Gwadabe noted that the CBN’s policy direction on rate unification will promote efficiency, transparency, price discovery and help phase-out multiple exchange rates regime.
Earlier, the apex bank had in the month, approved an upward review of the trading margin available to BDCs. The approval allowed BDCs to buy dollar from the apex bank at N357/$1 and sell at N360, enabling them to earn a positive margin of N3 per dollar sold.
Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, said the decision was aimed at giving BDCs a level playing field to enable them compete favourably with other authorised forex dealers.
Okorafor urged the BDC operators to abide by the new guidelines and not exploit eager customers by selling above the N360 band. He warned that erring BDCs would be sanctioned in any case of infraction established against them.
