BY BUKOLA IDOWU, Lagos
The Association of Bureaux De Change Operators of Nigeria (ABCON) has advised the Central Bank of Nigeria (CBN) on immediate steps to be taken to ensure that ongoing recovery of the naira against dollar is sustained.
In a statement released yesterday, ABCON President, Aminu Gwadabe, said the CBN should review BDCs dollar buying rate downwards from N360 to N350/$1 and enhance security surveillance at the boarders to checkmate illegal cash movement that has dire consequences on naira’s stability.
Gwadabe also said the standard/average trade margin for BDCs across the world is 12 per cent and reviewing the rate to N350/$1 is less than three per cent for Nigerian operators.
“The CBN should be proactive enough to quickly review the BDC buying rate so as to bring the foreign exchange transfer rate down and boost market stability. The BDC rate should be brought down to N350/$1 for now and see the positive impact on the local currency,” he said.
Gwadabe added that the rate challenges faced by BDCs, if not checked, would trigger a liquidity crisis that may derail the ongoing recovery of the naira against the dollar. He said the BDCs will continue to support CBN’s determination to achieve exchange rate stability, and strengthen the value of the local currency.
He explained that the downward review of the BDCs rate is critical at present, as it will keep BDCs afloat to meet increasing forex demand at the retail end of the market. “For now, the parallel market operators are taking over our business because BDCs rates and their selling rates are the same and this has to change,” he said.
He also called on the CBN to increase the volume of Personal Travel Allowances (PTAs) from $4,000 to $8,000; Business Travel Allowances (BTAs) from $5,000 to $10,000; school fees from $5,000 to $20,000 and medicals from $5,000 to $15,000 quarterly to deepen liquidity in the market.
Gwadade further said implementing these recommendations will help to stop a new wave of volatility building up in the forex market over parallel market/BDCs rate convergence. Both the parallel market and BDCs rate are trading around N360/$1, and the BDCs buy the International Money Transfer Operators (IMTOs) proceeds from the CBN at N360/$1.
He disclosed that with forex transfer rate at N375/$1, which is N15 higher than N360/$1 cash rate, rent seekers are mopping up dollars and moving them to Dubai, China and Lebanon .