Business
BDCs’ Forex Access woes Hamper Naira Recovery.
Bureau De Change (BDC) operators, under the Association of Bureau De Change Operators of Nigeria (ABCON), report difficulty purchasing foreign exchange from banks.
BDC operators attribute this to the parallel market exchange rate trading lower than the interbank proceeds sales to BDCs.
ABCON President Aminu Gwadebe noted the naira’s gains and stability in the forex market on March 5, 2025.
Gwadebe said licensed currency traders are not seeing a convergence of rates between the official and parallel markets.
Gwadebe stated the naira has maintained stability and appreciated in the foreign exchange market. He said they are witnessing the convergence of the official market and the open market (free funds/parallel markets).
He said the parallel market rate is trading lower than the interbank proceeds sales to BDCs.
He noted banks offered a weighted average of N1505/$, while parallel market levels were at N1503/$. This constrains BDCs from buying from banks.
Gwadebe urged the Central Bank of Nigeria (CBN) to issue a percentage on banks’ sales of diaspora remittances and portfolio investment proceeds to BDC operators.
He said this would sustain forex supply and discourage currency substitution, speculation, and frivolous demands.
He stated continued regulatory oversight on transparency of participants is needed regarding the maximum margin on banks’ sales to BDCs.
He added the CBN should issue a percentage on banks’ sales of diaspora remittances and portfolio investment proceeds to BDCs. This would continue to increase supply and discourage illegal economic behavior.
He said the CBN should not abandon intervention sales to BDCs. They are a key player in the foreign exchange market and back the naira’s strength.
He commended fiscal authorities for reducing the fiscal deficit.
He called on government agencies and state governments to declare a state of emergency on inflation to alleviate the suffering of Nigerians. He also urged them to maintain downward inflationary trends.
ABCON recently praised its members for implementing the CBN forex policy on interbank/EFEM proceeds sales to BDC operators.
The association noted the banks’ gradual implementation of the policy has greatly contributed to the naira’s recent appreciation.
Gwadebe said the banks’ gradual implementation of interbank/EFEM proceeds sales to BDCS has significantly increased the naira’s value.
He urged the CBN to collaborate with licensed BDC operators to ensure an adequate foreign exchange supply in the retail market.
It was earlier reported that the BDC operators had attributed the recent strong performance of the naira to the implementation of the CBN policy, which allows authorized dealers to sell foreign exchange directly to these licensed currency traders.
The BDC operators revealed that there is a lot of forex inflow coming into the interbank window with growing investors’ confidence and huge portfolio investments coming into the banks.