By Adedapo Adesanya
The Association of Bureau De Change Operators of Nigeria (ABCON) has said that the resumption of Dollar sales the Bureau De Change (BDC) window for foreign exchange and remittances will strengthen the Naira against the greenback.
This submission was made by the President of ABCON, Mr Aminu Gwadabe, during his interaction with the News Agency of Nigeria (NAN) on Sunday in Lagos.
The Naira has been facing pressures especially this month. As at Friday, Business Post reported that the Naira traded against the Dollar at the segment and the black market at N472 per dollar, while it neared N390 at the Investors and Exporters (I&E) window.
Mr Gwadabe said, “The immediate thing to be done to crash the rate is the reopening of the BDC window for school fees payments pending when the international air travels resume.”
He explained that the BDCs have always been the medium and bridge for the availability of liquidity in the retail end of the foreign exchange market, adding that they had always provided some level of exchange rate stability in the forex market due to its proximity of BDCs to genuine FX end users.
He said, “The germane role of BDCs is bridging the gap between the official rates and the parallel market rates, which was achieved from early 2017 to early 2020.’’
While appreciating efforts by the CBN in ensuring stability in the exchange rate, ABCON said that the factoring of BDCs into the FMDQ floor and Diaspora remittances agencies would ensure long term exchange rate stability in the economy.
The regular interventions at the foreign exchange market are also affected by low proceeds accruing from the sale of crude which brings in about 90 per cent of the country’s foreign exchange earnings
Diaspora remittances before the COVID-19 pandemic had also helped in boosting liquidity at the FX market but has since been affected due to the current health climate.
A World Bank report has projected that remittances to Nigeria and other Low and Middle-income Countries (LMICs) would drop sharply by 19.7 per cent to $445 billion in 2020 due to the economic crisis induced by the COVID-19 pandemic and lockdown.
