The Association of Bureaux De Change Operators of Nigeria (ABCON) has issued a plea to the Central Bank of Nigeria (CBN) for an adjustment of the exchange rate for Bureaux De Change (BDCs) to a level below N1,251/$. This request comes in light of recent market developments that have seen the naira appreciate to a rate lower than the CBN’s set rate for BDC transactions. ABCON, representing the licensed BDCs across the country, highlighted that the current rate set by the CBN has made it challenging for BDCs to sell to end-users, pushing customers towards unregulated forex operators offering more competitive rates.
The appeal for a rate adjustment is underscored by the naira’s unexpected rapid recovery in the forex market, where rates have dipped to as low as N1,235/$, rendering the CBN’s rate to BDCs unfavorably high and placing BDC operators at risk of significant financial losses. ABCON’s letter to the CBN, penned by its National President Aminu Gwadabe, points out the dilemma faced by BDC operators who, having funded their accounts in anticipation of dollar allocations at the set rate, find themselves unable to offload their dollars without incurring losses due to the current lower market rates.
ABCON’s correspondence with the CBN not only calls for an urgent downward review of the exchange rate but also addresses operational challenges BDCs are facing. The letter describes delays and scrutiny in the disbursement process at various collection centers, which has left many BDCs hanging with funded accounts but without the expected dollar allocations. This situation exposes them to exchange rate volatility and the potential for financial losses.
While acknowledging the CBN’s efforts to incorporate BDCs back into the official FX window and its measures to bolster the naira’s value, ABCON underscores the need for the central bank’s intervention to realign the official exchange rate for BDCs with the prevailing market conditions. The association commends the CBN’s initiative, which has expedited the naira’s recovery and pledges continued support for the central bank’s objectives toward achieving exchange rate stability and fostering economic growth.
Further, ABCON has put forth recommendations to improve the operational efficiency of BDC transactions. These include automating the payment process at disbursement centers to ensure timeliness, introducing a refund mechanism for BDCs unable to collect their disbursements due to unfavorable rates, and establishing a cut-off time for bid payments and collections to better manage and control the bidding process.
As the forex market shows signs of self-correction and the naira’s value continues to strengthen, ABCON’s appeal to the CBN for rate adjustment and operational reforms is aimed at maintaining the viability of BDC operations, ensuring competitive service provision to the public, and supporting the broader goals of exchange rate stability and economic development. The association emphasizes that prompt action from the CBN in addressing these concerns will reinforce BDC operators’ confidence in the central bank’s intervention measures and encourage active participation in the forex market.
