Bureau De Change (BDC) operators under the aegis of the Association of Bureau De Change Operators of Nigeria (ABCON) have called on the Central Bank of Nigeria (CBN) to allow them to provide liquidity in the retail end of the foreign exchange market.
This is coming on the heels of the CBN’s plans to introduce new foreign exchange intervention measures and improve liquidity in the forex market in order to stop the free fall of the naira against the dollar and stabilize the market.
This was made known by the ABCON President, Aminu Gwadebe, during a chat with Nairametrics, insisting that BDCs are effective tools of the transmission mechanism of CBN’s monetary policies.
The ABCON President advised the apex bank to immediately leverage the BDCs and allow them access banks’ autonomous window and agency of international money transfer operators.
Gwadebe also urged the CBN to reinstate its 2015 policy guidelines which allow the BDCs to effectively provide liquidity in the retail end of the market through the forex windows.
The 2015 policy guidelines allow the BDC operators to access foreign exchange from the autonomous window of the commercial banks as well as act as agents for diaspora remittances.
You need us to provide liquidity in the forex market
- Gwadebe in his statement said, ‘’First, I want to congratulate the Acting GOVERNOR on the president’s approval of the proposed CBN action plans. In view of the diversions and arbitrages that continue to create pent up demand and speculators attack on our local currency.
- ‘’I quickly want to advise the apex bank to leverage on the BDCs and allow them access banks’ autonomous window and agency of international money transfer operators. The BDCs are effective tools of the transmission mechanism of the CENTRAL BANK MONETARY POLICIES.
- ‘’I, therefore, urge the CBN to reinstate the 2015 CBN policy guidelines for BDCs to allow them effectively provide liquidity in the retail end of the market through the windows identified. The BDCs in 2006, 2009 and 2017 impacted the stability of the local currency positively in those years.
- ‘’I also want to assure the CBN that the BDCs are committed to enhancing corporate governance, knowing your customer, Due Diligence and obligations on Return rendition. ABCON is continuing strategic alliances with relevant stakeholders to ensure increased liquidity at the retail end market.’’
Banks don’t see the diaspora remittances
Gwadebe, who accused some of the International Money Transfer Organizations (IMTOs) of diverting diaspora remittances, said the commercial banks revealed that they don’t even see most of these remittances.
- The ABCON boss said, ‘’All along what we have been telling them we have been vindicated we have seen, this money is not coming, this money is being diverted, this money is left over there and that is why we recommended, let the BDCs terminate the transactions. There is no way I can terminate the transactions to you as a beneficiary in Nigeria as a Bureau De Change without me having the second leg of the dollar.
- ‘’Imagine you are the IMTO and then you are the one that will pay the beneficiary the naira, invariably, then I as well just give you the naira without paying you the dollar.’’
Acknowledging what the acting CBN Governor said that most of the transfers done by the IMTOs are not been tracked, Gwadebe stated, ‘
- ’What the acting Governor of the CBN said is the truth, he has the data, he has the information, we too have been saying this all along.
- “Even the banks have been saying that they are not seeing the diaspora remittances that the fintechs have taken over. We had a meeting with the banks where we even tried to bring up the issue of diaspora remittances so that we can harness it and bring liquidity, but they said they don’t see it. That’s the truth of the matter, a lot of unlicensed online firms are in the process.’’
CBN moves to wipe out the disparity
The acting CBN Governor, Fola Shonubi, yesterday warned currency speculators of potential losses as they implement a new policy to stabilize the exchange rate.
Shonubi said the apex bank has come up with a yet-to-be-announced policy that will wipe out the disparities between the official and black market rates.
The black market rate fell to as low as N950/$1 last week, opening up about N200 disparity with the I&E window as demand continued to outstrip supply. Meanwhile, the official rate averaged N765/$1.
Mr Shonubi spoke about the concerns of the president about the forex situation and mentioned that efforts are in place to stabilize the exchange rate.
He insisted the fluctuations in the parallel market are not solely driven by economic factors of demand and supply, but also by speculative demand.
- Shonubi said, “We do not believe that the changes going on in the parallel market are driven by pure economic demand and supply, but are touched by speculative demand from people.
- “Some of the plans and strategies, which I’m not at liberty to share with you, means sooner rather than later, the speculators should be careful because we believe the things we’re doing, when they come to fruition, may result in significant losses to them.
- “But my presence here is more about the concerns the President has and his needs to know that we are doing something about it, assurances of which I have given him totally.
- “So I hope this helps. We are looking at it and we’re doing things that will significantly impact the market in a few days time and we will all see it.
- “The intention is to ensure the environment operates at a level that’s more efficient, but also that is also very reasonable and does not have a negative impact to the best that we can on the lives of the average person.”
Yes it’s good to sterilize the doller rate in the country. But the main problem is that, some Times government are used to disappoint Nigerians! And price controls is very important in our country.