- BDCs Seek FX Rate Review, Increased Allocation
The Association of Bureaux de Change Operators of Nigeria (ABCON) has called on the Central Bank of Nigeria (CBN) to review the margin allowed to sell to customers from N2 to N10 and also increase foreign exchange (FX) allocation given to the sub-sector weekly.
The acting President, ABCON, Alhaji Aminu Gwadabe said this at an emergency meeting with Managing Directors/Chief Executive Officers of BDCs in Lagos yesterday.
However, Gwadabe and other operators at the meeting applauded the central bank for its improvement in supply, which saw BDCs receive $20,000 last week. But they argued the margin they are allowed to sell to end users at N2 was too small.
Gwadabe said: “We have told the regulators that margin is small. The margin of N2 is too small the CBN should review that margin to at least N10 per dollar.”
Furthermore speaking on the side-lines, he added: “The BDCs from the resolution have resolved to ensure that the challenge spike and volatility in the foreign exchange market. We would corporate with the central bank as we always do so that we narrow the gap between the parallel market and the also the official market.
“We are looking at a very acceptable target. There are lots of pressure from the IMF who says our naira is overvalued and also pressure from speculators, black market operators and people who carry hot money. “We are looking at a very acceptable margin between the official and the parallel rate at max it shouldn’t be more than five per cent.”
He also urged operators to abide by the rules and regulations of the association so as not to embarrass ABCON.
“We also advise the CBN to at least be accepting utilisation documents that comes from the association so that they can verify the documents our members are using to ensure that erring members are also being sanctioned from the market.
“On the issue of the BDC office where N450 million was found, we have done investigation and the thing is still under the security purview.
“But we can assure you that our investigation is on-going, we have identified the characters involve and we are going to write them to invite them. The reason we call this meeting is to say that we condemn it in entirety.
“If you are a member and you are found with N500 mill that is total abuse of the Know-Your-Customer policy. It is a total abuse of the cash transfer report, it is total abuse of the suspicious transaction report and that is the message we have told our members that they must respect those compliances.”
Also he said the association in collaboration with the Nigerian Interbank Settlement System (NIBBS) was working on a platform which would register end-users real-time to avoid infringements.
“Sometimes it is difficult to know that an end-user has used that passport. They so perfect it that even if you put stamp, they can go and clean it and represent it to you to buy dollars. So what we are doing with NIBBS is that there is a platform that they have developed whereby all the passport that buys dollars will be stored on that platform.
“So a BDC will just go into that platform and impute the passport number and it will show if that passport has been used by a particular bank or BDC.”
Furthermore, he said: “Since the CBN resumed selling dollars to BDCs, the market has gained more liquidity and naira strengthened to a large extent. The foreign exchange speculators have suffered major losses because of the role of genuine BDCs in helping the CBN to put them under sever check.
“I want to thank you for the success we have recorded even as I tell you that greater challenges lie ahead. We must confront these challenges together and with integrity and commitment to professional and regulatory guidelines.”
