Bureau De Change Operators Report Rising Expenses Amid Dollar Allocations, Warn Of Losses 

Bureau De Change Operators Report Rising Expenses Amid Dollar Allocations, Warn Of Losses ....KINDLY READ THE FULL STORY HERE▶

The Association of Bureau De Change Operators of Nigeria (ABCON) has urged the Central Bank of Nigeria (CBN) to reconsider and reduce the exchange rate it sets for Bureau De Change (BDC) operators, citing its current level as prohibitively expensive.

This plea from the BDCs comes amidst a significant development: for the first time in 15 years, the parallel market rate of N1,235/$ has dipped below the official rate of N1,252/$, which is the rate at which BDCs purchase foreign currency.

ABCON President, Aminu Gwadabe, conveyed this request in a letter addressed to the Director of the Trade and Exchange Department at the CBN.

The association pointed out that the rapid recovery of the Naira, surpassing expectations, has rendered the CBN’s selling rate to BDCs overly costly and challenging to sell to retail customers who often seek cheaper rates from informal forex traders.

According to ABCON, many BDCs who have already funded their accounts for dollar allocations are yet to receive their allocated dollars to fulfill the legitimate demands of their clients. This delay is attributed to the meticulous scrutiny of documents by BDCs for collection at designated centers, exposing them to exchange rate risks and potential losses.

ABCON emphasized that with the Naira gaining strength in various markets, BDCs who purchased dollars at N1,251/$ would face significant income and capital losses if they were to sell at the prevailing open market rate of N1,235/$. Hence, they stressed the urgency for a downward revision of the exchange rate to align with current market dynamics, thereby safeguarding the interests of BDC operators.

In their statement, ABCON highlighted their concerns, stating, “We have observed a concerning trend where many of our members who paid for dollar allocations at N1,251/$ are still awaiting disbursement. This is occurring despite the prevailing open market rate of N1,235/$, which is lower than the authorized exchange rate set by the CBN for BDCs.”

“In light of these market developments, we appeal for a downward review of our funding rate for the latest tranche (2nd bidding) from N1,251/$ to reflect the current market rate. This adjustment is crucial to enable our members to manage their positions effectively,” the statement continued.

“Many of our members are hesitant to bid or collect their bids due to the risk of incurring losses, given the current market conditions. It is imperative to address this situation promptly to ensure market stability and protect the interests of BDC operators,” ABCON concluded.

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