Forex traders under the supervision of the Association of Bureau De Change Operators of Nigeria (ABCON) have announced that they will launch “Operation No Street Trading” to prevent BDC operators from selling foreign exchange.
This is one of the steps targeted at lowering the exchange rate, which has been on the rise recently, especially since the Central Bank of Nigeria adopted the NAFEX rate as the new official rate.
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Alhaji Aminu Gwadabe who is the president of the ABCON made this known to the public saying that it was part of the resolutions made unanimously by BDC directors at the meeting of the operators on Tuesday, June 2, 2021, in Lagos.
According to ABCON
ABCON in the resolution told BDCs to improve on their return rendition to regulatory authorities, warning that defaulting members would be punished.
The resolution from ABCON partly reads, “All operators are to collaborate in bringing down the forex rates in the market; street trading by BDC should be discouraged/banned and ABCON will commence operation ‘no street trading’.
BDCs should improve return rendition to regulatory authorities; margin review to meet operational requirements; widening the scope of transactions; digitalisation of BDC operations.
ABCON to punish errant members; ABCON compliance officer and staff to commence nationwide supervision of BDC operations.”
Points to Note
Despite the CBN selling forex to BDCs at N393 per dollar, the exchange rate has been rising since the CBN adopted the NAFEX rate as the official rate, with the dollar selling for N499 on Thursday afternoon.
In a statement issued on Sunday, ABCON urged foreign exchange consumers and the general public to use only CBN-licensed BDC companies to obtain dollars at the allowed rate.
Gwadabe said the parallel market activities had for years become major drivers of the exchange rates, adding that control over such transactions had become burdensome.
He said forex speculators were capitalizing on the state of the forex market and the naira to sell dollars above the CBN-approved margin.
ABCON had some days ago, said that foreign exchange speculators are set to lose over N100 billion in the next one month as the CBN sustains massive funding for Bureau De Change (BDC) operators
The ABCON President appealed for the market to return to normalcy, claiming that current aggressive behavior was hindering market operations.
The continuous depreciation of the naira on the parallel market and in the Investors and Exporters (I&E) Forex window, according to the ABCON chairman, is due to currency speculators hoarding dollars to profit from the currency crisis.
According to him, the criminals are generating an artificial scarcity of the greenback in the market in order to exacerbate the local currency’s problems.