BDCs to Boycott $25m CBN Auction Over Pricing

External ReservesPhotographer: Susana Gonzalez
  • BDCs to Boycott $25m CBN Auction Over Pricing

Bureaux de Change (BDCs) operators said they will not participate in today’s $25 million weekly dollar auction by the Central Bank of Nigeria (CBN).

President of Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe said market fundamentals, including the current selling rate of $381 to dollar do not favour the BDCs.

He said the ongoing market resistance makes it difficult for BDCs to sell dollars above their purchasing rates.

“Definitely, we will not be part of tomorrow’s (today’s) auction. The market fundamentals do not support our participation in the auction. Remember that the money is from the International Money Transfer Operators (IMTOs) proceeds, which the CBN sells at N381 to dollar, far above the banks’ selling rate of N360 to dollar and parallel market rate of about N380 to dollar,” he told The Nation.

He urged the CBN to review the IMTOs’ rate to N330 to dollar, which was the previous rate at which the operators bought. “The CBN should return the IMTOs cash to original rate of N330 to dollar for the BDCs to continue to buy,” he said.

Gwadabe said the CBN maybe setting a trap for the BDCs to fall into and get punished. “We are discussing with our members on the new development. The truth is that there is no way we can breakeven with the current rate. The CBN might be thinking that with a lower rate, the IMTOs may not bring in the dollars. But we want a review of the rates,” he said.

Some of the major IMTOs include Western Union, MoneyGram and Ria. Others are Trans-Fast Remittance LLC; WorldRemit Limited, UAE Exchange Centre LLC; Wari Limited, Homesend S.C.R.L, Small World Financial Services Group Limited and Weblink International Limited. Others are Cash Pot Limited, DT&T Corporation Limited, Fiem Group LLC DBA Ping Express and CP Express Limited among others.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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