BDCs want CBN to scrap multiple forex rates
Bureaux De Change (BDC) operators have urged the Central Bank of Nigeria (CBN) to create what they called ‘Bureaux de change Autonomous Foreign Exchange Market’ in a bid to end multiple exchange rates and usher in stability in the foreign exchange market.
Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), made the call at the weekend in Lagos.
Gwadabe called for collaboration between the BDCs and the CBN in the implementation of market-friendly policies that would make the BDCs promote exchange rate stability in the economy.
He said: “The hasty generalisation that criminalises the BDC sub-sector as responsible for all market crisis 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, is not in the best interest of the market and economy.
“It is in view of this disturbing situation and the need to strengthen BDCs value chain as obtainable in organised climes that we urge the regulators and policymakers to consider BDCs as the most potent tool in liberalising the foreign exchange market and stopping multiples exchange rates in the system.”
Gwadabe said the BDCs had since 2006 provided policymakers with a window in achieving 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.
“In order to address the challenges facing the forex market, now is the time to integrate BDCs into the market activities as agents of stabilisation,” he said.
On how ready the BDCs are for the responsibility, Gwadabe said the operators had for years been preparing for this by integrating technology into their operations and promoting efficiency and transparency in their businesses.
According to him, ABCON trains compliance officers to ensure they are acquainted with what is required of them, especially on monthly rendition of results and tracking illicit capital flows to the market through compliance initiatives.
He said the BDCs would continue to comply with the rendition of suspicious transactions reports as directed by the Nigerian Financial Intelligence Unit, CBN, and the Economic and Financial Crimes Commission through constant training of their directors and sanctioning of erring operators.
He said: “In compliance with the provisions of Bank and Other Financial Institutions as amended, every BDC renders returns to the CBN in prescribed format and within the deadline stipulated by the CBN.
“The records of the BDCs are made readily available to the CBN examiners as and when requested including carrying out customer due diligence, corporate governance and tax returns.”
He said that ABCON has over the years established itself as a key player in the BDC industry, made several commitments and sacrifices to ensure that the sector continues to thrive against all odds.
“We, therefore, conclude by urging the regulators to consider our proposal for the creation of Bureaux de change Autonomous Foreign Exchange Market (BAFEX) to replicate I&E window initiative, and address concerns of stakeholders like Nigerians in Diaspora, foreign investors, international financial institutions stability of the market,” he said.
Gwadabe said such a move would help in curbing illegal online operators and integrate the various unlicensed market operators across the country towards achieving price equilibrium, transparency, competitiveness and an end to wider premium.
“The BAFEX will prevent currency substitution, hoarding, illegal cash evacuation through the porous borders and, above all, reduce to the barest minimum the twin effects of flexible and managed float (fixed) exchange rate systems in the economy,” he said.
Gwadabe reiterated ABCON’s commitment to boosting liquidity in the forex market, fulfilling its regulatory mandate of bringing forex closer to the end-users and supporting the CBN’s goal of achieving sustainable exchange rate stability.