BDC Operators Lament Difficulties in Getting FX Allocations from CBN

By Aduragbemi Omiyale

The Association of Bureaux De Change Operators of Nigeria (ABCON) has expressed frustration at the bottlenecks it encounters in getting foreign exchange (FX) allocations from the Central Bank of Nigeria (CBN).

In a letter to the Director of Trade and Exchange Department of the central, the president of ABCON, Mr Amimu Gwadabe, said some members of the group who funded their accounts for FX allocations were yet to receive their requests to meet up the legitimate critical demand of their clients.

He blamed this on the scrutiny of the documents of the BDCs for collections at the various designated centres, which he said has made ABCON members to be vulnerable to exchange rate risk, suffering significant losses.

In the letter, he appealed to the central bank to adjust and lower its applicable exchange rate below the N1,251/$ it pegged for its members, as the parallel market rate was hovering around the rate of 1,235/$.

“We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$ with a margin of 1.5 per cent are yet to receive their disbursement.

“This is happening in the face of the prevailing open market rate of N1,235/$, which is lower than the authorised applicable exchange rate by the CBN to the BDCs,” a part of the letter said.

“It is in view of the above market developments that we write to appeal to your good selves for 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,” Mr Gwadabe added.

However, he praised the CBN for re-introducing BDC operators into the forex market, saying this has helped to strengthen the value of the Naira in the market.

He assured that the group would continue to support the central bank to achieve its policy goals, expressing confidence that the Naira will continue to appreciate further across the market with the increasing sources of foreign exchange inflows aided by the CBN policies