BDCs Demand $30,000 Weekly Allocation

Dollar
  • BDCs Demand $30,000 Weekly Allocation

Bureaux De Change (BDC) operators yesterday called on the Central Bank of Nigeria (CBN) to review their $8,000 weekly allocations upwards to $30,000 as dollar liquidity in the economy continues to improve.

The operators also urged the apex bank to harmonise the rate at which the dollars are sold to BDCs with the rates at which commercial banks purchase their dollars from the regulator.

President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe who spoke on the operators’ demands, said raising the weekly dollar allocations to BDCs will deepen dollar liquidity and force the rates further down.

Gwadabe regretted that the CBN is selling dollars to BDCs from the International Money Transfer Operators (IMTOS) proceeds at N381/$ while the regulator sells to commercial banks from the interbank market proceeds at N315/$. He said the banks buy at N315/$ and sell at N375 while the BDCs buy at N381/$ and sell at N399.

The ABCON boss said by selling at different rates to banks and BDCs, the regulator has placed BDCs at a disadvantage position, saying this could lead to currency speculation.

Gwadabe urged the CBN to harmonise the BDCs and banks rates to ensure fair pricing and competition as well as create greater confidence in the market.

He also called on the banks to bring out their dollar reserves and help the CBN deepen the market. “It is supposed to be a two-way quote whereby both the CBN and banks are pumping dollars into the economy to help the local currency. Today, it is only the CBN that is performing the role while the banks continue to warehouse their dollars. I want the banks to also feed the system with dollars so as to help the local currency sustain ongoing rally,” he stated.

Meanwhile, the naira closed at N450 to dollar lower than N445 traded on Tuesday. The local currency is expected to firm in the days ahead as the impact of $180 million intervention from the Central Bank of Nigeria (CBN) and plans to sell Personal and Business Travel Allowances begin to add up. Naira has been rallying against the dollar in the last one week at the parallel market.

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.

2 Comments on "BDCs Demand $30,000 Weekly Allocation"

  1. Thanks, very insightful report .Pls re-edit your article. How can 450 be lower than 445 ? Check the first sentence of the last paragraph of your article.

    • N450/$ is lower than N445/$. It simply means the Naira depreciated lower against the US dollar to N450 from N445 it traded on Tuesday. Thanks for stopping by Tony Pally.

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