Nairametrics| Bureaux de Change (BDCs) in Nigeria have announced that starting January 16, 2017, they will start posting official forex rates for the parallel market on their websites. According to their association, the exchange rate will be updated each Monday in the website. The exchange rate will open at N396/$1. Why though do the BDCs want to launch a parallel official forex rate?
According to them, for two reasons. First, they believe that this would help the Central Bank of Nigeria (CBN) combat unregulated trading in the parallel market where the apex bank has little to no control over exchange rates, Aminu Gwadabe, the head of the local BDC association, told Bloombergin Lagos.
The second reason, according to the BDCs, which is closely related to the first, is that BDCs believe that this update will “highlight positive rate development in the market” and counter domains, which publishes unofficial prices daily. The belief is that some of these domains may be reporting higher rates than what is presently in force in the parallel market, the result of which is a further upward drive of the exchange rate.
The Naira has been subject to weakening values against the dollar since last year, when the price of crude oil, which constitutes the major source of the country’s revenue, dipped sharply. This is despite the attempts by the CBN to strengthened capital controls and manipulate the interbank exchange rate.
