Forex traders under the aegis of the Association of Bureau De Change Operators of Nigeria (ABCON) have said they will start what it called ‘Operation No Street Trading’ to stop the hawking of foreign exchange by BDC operators.
This is part of the measures aimed at bringing down the exchange rate which has been on the rise recently especially after the adoption of the NAFEX rate as the new official rate by the Central Bank of Nigeria.
This disclosure was made by the President of ABCON, Alhaji Aminu Gwadabe, who said that this was part of the resolutions made unanimously by BDC directors at the meeting of the operators on Tuesday, June 2, 2021, in Lagos.
READ: ABCON asks CBN to check the impact of cryptocurrencies on diaspora remittances
What ABCON is saying
ABCON in the resolution told BDCs to improve on their return rendition to regulatory authorities, warning that defaulting members would be punished.
The resolution from ABCON partly reads, “All operators are to collaborate in bringing down the forex rates in the market; street trading by BDC should be discouraged/banned and ABCON will commence operation ‘no street trading’.
BDCs should improve return rendition to regulatory authorities; margin review to meet operational requirements; widening the scope of transactions; digitalization of BDC operations.
ABCON to punish errant members; ABCON compliance officer and staff to commence nationwide supervision of BDC operations.”
READ: Forex speculators to lose N100 billion as CBN sustains massive funding for BDCs
What you should know
Despite the sales of forex at N393 to a dollar to BDCs by the CBN, the exchange rate has been on the rise since the adoption of the NAFEX rate as the official rate by the CBN with the dollar selling for N499 on Thursday afternoon.
ABCON had in a statement on Sunday, advised foreign exchange users and the general public to patronize only BDC operators licensed by the CBN in order to get dollars at the approved rate.
Gwadabe said the parallel market activities had for years become major drivers of the exchange rates, adding that control over such transactions had become burdensome.
READ: Central Bank Digital Currency: Is ‘NIGCOIN’ possible?
He said forex speculators were capitalizing on the state of the forex market and the naira to sell dollars above the CBN-approved margin.
ABCON had some days ago, said that foreign exchange speculators are set to lose over N100 billion in the next one month as the CBN sustains massive funding for Bureau De Change (BDC) operators.
The ABCON President called for the return of normalcy of the market as the ongoing speculative behavior was hampering the market operations.
The ABCON boss linked the continued fall of the naira at the parallel market and Investors’ and Exporters’ (I&E) Forex window to currency speculators who are hoarding dollars to profit from the currency crisis.
He said the perpetrators are creating an artificial scarcity of the greenback within the market to cause more woes for the local currency.
Good
Nice one
BDCs will not be scrabbed simple because the people in power, regulators are the owners, shareholders and directors. Most of these policies are intentions, let’s not bother ourselves.
Interesting but the group should published there contact to public, to show equity and fairness, because this people called dollar exchangers don’t kill us thank you for this ideas
In India they display the daily official rate, infact the regulators publish on daily basis what the operators should sell, this is on-line, not speculative
CBN is the Problem of forex in the country. Why would you be giving dollars to unmonitored, low tech complainant BDC at N389. BDC is the parallel market. Scrap BDC now or digitize it so that they can be monitored. The CBN non-forex worthy list of items are all funded through the sharp practices of BDC operators. CBN is fooling itself.
You get to a BDC and they tell you dollars is not available, why not let banks sell dollars to us, you reduce the ATM/web dollar usage, we have no choice but to patronize BDC, BDC says no dollars because dey don’t want to sell at that rate. We have no choice but to get from the parallel market, if demand is high then price will go up. Common sense. They know what to do to get everything right, but for some reason will not.
You see….the truth is that the CBN is also a part of the parallel market because they have insider that just wont make the smooth flow of forex work because of the huge profit they make from it.it very easy to solve this by selling directly to people and ensuring all necessary documents rations are collect when selling to them and then thr BDC will also comply and then parallel market will automatically align to what is prevailing in the market.Common sense is not common.