- BDCs Want CBN to Review Exchange Rate Band
The Association of Bureaux De Change Operators of Nigeria, the umbrella body of over 3,500 BDC operators licensed by the Central Bank of Nigeria in the country, has called for an emergency meeting of its members to discuss critical issues facing them.
Among other issues to be discussed, a statement on Monday by the association said its executive members would be asking the CBN to review the exchange rate band stipulated for the BDC operators.
The near convergence of exchange rates across the foreign exchange market has come with several business challenges for the BDC operators in recent times.
Specifically, ABCON said the meeting would focus on the convergence of the exchange rate at the BDC segment of the forex market with the commercial banks’ rate, and the need to tackle the spate of unregistered currency retailers in the forex market.
The statement quoted the ABCON President, Aminu Gwadabe, as stating that the meeting, scheduled to hold in Lagos on Wednesday, would be attended by representatives of the 3,500 CBN-licensed operators.
The ABCON president was quoted as saying that issues around payment of Company Income Tax, Value Added Tax, the CBN licence renewal and annual subscription fees by the BDC operators, as well as late disbursements of forex at various centres would also be discussed.
According to him, the negative margins being experienced by the BDCs, annual review of operating licence, and approval of additional forex disbursement centres in Port Harcourt, Maduguri, Benin, Ibadan, among others, are top issued slated for discussion at the meeting.
Gwadabe observed that the challenges facing the BDCs were enormous, noting that many forex users preferred to patronise commercial banks for Business Travel Allowances, Personal Travel Allowance, medical bills and school fees payment abroad in place of the ABCON members.
The statement read in part, “The exchange rate at both the parallel market and the BDCs segment closed at the weekend at N361/$1. The attractive rate at the parallel market has triggered a massive influx of demand from forex users who are running away from the mandatory regulatory documentations sought by the BDCs.
“Many forex users prefer to buy at the parallel market instead of the BDCs because there are no longer rate gaps. They prefer the parallel market where there is no single documentation required. That is why we are calling on the CBN to review the rate band for the BDCs.”
Gwadabe said the challenges faced by the BDCs, if not checked, would trigger a liquidity crisis that might derail the ongoing recovery of the naira against the dollar.
“We want the CBN to review the BDC rate to ensure that currency speculators do not return to the market. Remember the BDCs buy dollar at N360/$1 from the International Money Transfer Operators.”