• Thursday, June 13, 2024
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BusinessDay

BDCs seeks CBN’s support to meet retail end FX demand

The Association of Bureaux De Change Operators of Nigeria (ABCON) has solicited the support of the Central Bank of Nigeria (CBN) in ensuring that Bureaux De Change (BDCs) continue to sell dollars to retail end forex buyers.

In a notice to its members released at the weekend, ABCON national executive council (NEC), appealed to the regulator to revisit the stoppage of dollar sales to BDCs, to bring lasting stability to the naira.

The group disagreed with claims that naira has remained largely stable and converging following the stoppage of dollar allocation to BDCs.

According to ABCON, BDCs remain the most potent tool for the CBN to achieve its foreign exchange rate management.

“Our position to CBN is that our members should be considered in whatever mechanism of dollar supply to the end-users as it is done in other countries instead of a total blanket removal from the market. We, therefore, reject the statements claiming that the naira exchange rate has improved following stoppage of dollar sales to BDCs and urge our members to ignore those pronouncements,” it said.

The ABCON NEC said it will continue to take steps that ensure that the business of its members are restored and operators continue their legitimate operations as is done in other parts of the world.

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“We the executives are not sleeping on our responsibility to ensure that our members’ businesses are sustained. We call on all our members to ignore statements against the BDCs and continue to give us the necessary support in ensuring normalcy is restored to the market,” the statement said.

It added that the ABCON management will continue in its collaboration, lobbying, media campaign and stakeholders’ engagements to ensure that BDC operators are given the right support and opportunity to thrive as is done in several other economies in the world.

The ABCON argued that the BDC sub-sector was not responsible for naira exchange rate volatility. “The naira exchanges at N416.25/$ at the official market. However, at the parallel market, where the majority of forex is sourced by manufacturers and retail end-users, the naira exchange at N587/$, representing over N170 premium between both markets,” the statement said.

According to ABCON, “it is on records that the stoppage of FX sales to BDCs did not only create higher demand pressure but also made the value of our national currency useless”.

“It is also a reality that majority of foreign exchange retail end-users cannot meet their demands from the preferred professional banks,” the statement said.

It said the inclusion of BDCs in dollar supply mechanisms will help reduce the challenges faced by forex end users and support naira stability.