Nairametrics| The Central bank of Nigeria (CBN) last week introduced a new Forex Policy that allowed them sell forex directly to commercial banks. In the new policy directive, the CBN made no mention of BDCs leaving most analysts to wonder what could be their fate in this new forex regime. The BDC’s have now reacted for the first time and as expected, they had some good and bad things to say.
This is based on a Vanguard Newspaper article;
The good
- The President, Association of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwadabe, said on Friday that the new policy was “a long awaited liberation the Naira needed to check speculators from manipulating the exchange rate for their selfish ends.”
- According to him, the market is already adjusting at a faster pace as the Naira continues to appreciate across board in all the major segments of the market.
The bad
- Gwadabe emphasized that BDCs were not competing with commercial banks in the sale of the proceeds of International Monetary Transfer Services Operators to end-users.
- He also complained that the new directive did not provide a level playing ground for the banks and the BDCs to operate.
- In his words “This is a great source of worry to ABCON because BDCs are not meant to be in competition with the banks, We are supposed to provide complementary roles.”
As stated in this blog, the CBN will need to decide what it plans to do with the BDC’s as they are critical to ensuring that the exchange rate is stable. Last year, about $55 million was sold to BDC’s down from an average of $5 billion in prior years.