Pegging its demand on the Naira’s speedy recovery, the Association of Bureaux De Change Operators of Nigeria (ABCON) has urged the Central Bank of Nigeria (CBN) to reduce its applicable buying exchange rate downward.
On March 25, CBN had announced the second tranche of sales of foreign exchange (FX) to BDC operators at the rate of N1,251/$1 and instructed they must not sell at over 1.5 percent profit.
This meant BDCs were not expected to sell above N1,269/$1.
But ABCON complained that this was the first time CBN’s applicable buying exchange rate at N1,251/$1 would be higher than the open market rate of N1,235/$1.
ABCON said the N1,251/$1 applicable buying exchange rate CBN pegged for bureau de change (BDC) operators would result in losses for its members, since the open market rate stood at the lower price of N1,235/$1.
ABCON President Aminu Gwadabe made the submission on behalf of the association in a letter to the CBN of Director, Trade and Exchange Department.
The association wrote: “We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$ with a margin of 1.5% are yet to receive their disbursement. This is happening in the face of prevailing open market rate of N1,235/$ which is lower than the authorised applicable exchange rate by the CBN to the BDCs.
“It is in view of the above market developments that we write to appeal to your good selves for a readjustments and review downwards of our funding rate of the last tranche (2nd bidding) from N1,251/$ further down to reflect current market rate discovery.
“This became imperative as it is only the consideration of the readjustment downward that will enable our members to upload their holding positions….
“That based on the offer and acceptance rule, the approval of refunds to those that are yet to collect disbursement having funded their accounts as it is the market that determines the rate presently be considered going forward.
“Consequently, many of our members are jittery to bid/collect their bid for fear of losing money as the current market reality has the potential to force us to sell below cost price and antithetical to recent market price discovery,” the group said.
In a circular signed by the bank’s Director, Trade and Exchange Department, Dr. Hassan Mahmud on Monday, March 25, 2024, the apex bank directed each BDC to sell the dollars to eligible customers at a rate not exceeding 1.5 percent above the purchase price.
The circular read in part, “We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject, wherein the CBN approved a second tranche of the sale of FX to eligible BDCs.
“We write to inform you of the sale of $10,000 to each BDC at the rate of N1,251/$1. The BDCs are to sell to eligible end users at a spread of not more than 1.5 percent above the purchase price.”
The CBN had announced this decision to sell foreign exchange worth $10,000 to eligible Bureau de Change operators across the country in February, over two years since former CBN Governor, Godwin Emefiele, stopped sales them.
