A showdown appears to be looming between Bureau De Change (BDC) operators in the country and the Central Bank of Nigeria (CBN) over new foreign exchange measures unveiled by the apex bank over the weekend. In a statement issued on Saturday, CBN’s Acting Director of Corporate Communications, Mr. Isaac Okorafor, had explained that the measures were aimed at improving foreign exchange liquidity and ensuring that eligible travellers are able to access foreign currency.
The regulator, in the statement, mandated all Deposit Money Banks (DMBs) to buy and sell foreign currency to travellers (both customers and noncustomers) upon presentation of relevant valid travel documents such as visa and tickets over the counter. It added that all travellers should be attended to immediately at banks’ counters. Specifically, it also stated that: “All BDCs shall, henceforth, access dollars from the CBN on Mondays, Wednesdays and Fridays.
It is compulsory that all BDCs access currency at least three times weekly. Any BDC that fails to access the FX window at least three times weekly shall have their license reviewed by the CBN. Compliance is compulsory.” But reacting to the CBN’s new FX measures yesterday, the Association of Bureaux De Change Operators of Nigeria (ABCON) rejected the directive that they should make three forex biddings and purchases on weekly basis.
The association also insisted that the regulator should review BDCs’ dollar purchase rate to align with commercial banks’ buying rate.ABCON President, Alhaji Aminu Gwadabe, in a statement, said that the CBN’s directive mandating BDCs to make such purchases is not in line with global best practices and should be put on hold.
He said: “The CBN’s directive at this time of our operational difficulties is, no doubt, precarious and vague and was intended to emasculate a sector that has helped the system to stabilize and thus unacceptable.”
Gwadabe said the regulator should first merge BDC dollar buying rate with that of commercial banks and also pay ABCON disbursement fees as it is practiced globally, citing Travelex which, according to him, also collects forex disbursement fees from the CBN. The ABCON President recommended that the CBN should cut the three market days for buying dollars to two at $30,000 per market day.
He said: “The rate between the banks and BDCs should be merged for uniformity and fairness. A situation where the banks buy dollar from the CBN at lower rate than the BDCs is not helping the market stability drive. Besides, ABCON should be considered for disbursement fees like Travelex in the collection centres to ameliorate the new assignments.”He argued that making Fridays as market days and funding same day will be difficult to achieve and, therefore, should be discouraged.
Stressing that licensed BDC operators were already facing increasing difficulties arising from over regulation and complex documentation requirements, he appealed to the CBN to take urgent steps to review the rate at which the dollar is sold to BDCs in order to boost ongoing recovery of the naira against the dollar.
He said: “The BDC business has been badly affected by ‘uncompetitive’ rate as the CBN sells dollars to BDCs at higher rate compared to what it sells to commercial banks, yet both institutions target the same market segment and customers. “The BDCs buy dollar from the International Money Transfer Operators (IMTOs) at N360/$1 and sell to end users at N361.5/$1 while the CBN sells to commercial banks at N357/$1 and the banks sell to end users at N360/$1.”