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Nigerian Bureaux De Change operators urge central bank to adjust exchange rate

Association Appeals for Lower Exchange Rate Amid Market Discrepancies

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The Association of Bureaux De Change Operators of Nigeria (ABCON) has called upon the Central Bank of Nigeria (CBN) to reconsider and decrease its applicable exchange rate, currently set at N1,251/$, for its members.

In a letter addressed to the CBN Director of the Trade & Exchange Department, ABCON National President, Aminu Gwadabe, highlighted concerns regarding the disparity between the CBN’s set exchange rate and the prevailing parallel market rate of 1,235/$.

Gwadabe expressed dismay over the challenges faced by BDCs in offloading CBN-dispensed currencies to retail buyers due to the comparatively higher selling rate imposed by the apex bank. He further voiced apprehension over delays in dollar allocations to BDCs, leaving them vulnerable to exchange rate risks and potential losses.

“We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$ with a margin of 1.5 per cent 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 authorised applicable exchange rate by the CBN to the BDCs,” the letter stated.

Despite these challenges, ABCON commended the CBN’s efforts to bolster the naira against global currencies and welcomed the initiative to recall BDCs into the official FX window. Gwadabe reiterated ABCON’s commitment to collaborating with the CBN to achieve exchange rate stability and economic growth objectives.

The association emphasized the need for a downward review of the funding rate from the last tranche bidding and urged for automation of payment processes at disbursement centres to ensure timely payments and efficient transaction management.

ABCON advocated for the introduction of a cut-off time for payments and bid collections, citing the current open-ended system’s inadequacy in facilitating effective administration and control.

Addressing the exchange rate disparities, ABCON underscored the importance of swift action by the CBN to restore confidence among BDC operators and enhance their participation in the bidding process.

The appeal reflects the ongoing dialogue between regulatory bodies and financial stakeholders to address market challenges and promote stability in Nigeria’s foreign exchange market.

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