Forex traders under the aegis of the Association of Bureau De Change Operators of Nigeria (ABCON) have said they will start what it called ‘Operation No Street Trading’ to stop the hawking of foreign exchange by BDC operators.
This is part of the measures aimed at bringing down the exchange rate which has been on the rise recently especially after the adoption of the NAFEX rate as the new official rate by the Central Bank of Nigeria.
This disclosure was made by the President of ABCON, Alhaji Aminu Gwadabe, who said that this was part of the resolutions made unanimously by BDC directors at the meeting of the operators on Tuesday, June 2, 2021, in Lagos.
What ABCON is saying
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; digitalization of BDC operations.
ABCON to punish errant members; ABCON compliance officer and staff to commence nationwide supervision of BDC operations.”
What you should know
Despite the sales of forex at N393 to a dollar to BDCs by the CBN, the exchange rate has been on the rise since the adoption of the NAFEX rate as the official rate by the CBN with the dollar selling for N499 on Thursday afternoon.
ABCON had in a statement on Sunday, advised foreign exchange users and the general public to patronize only BDC operators licensed by the CBN in order to get dollars at the approved 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 called for the return of normalcy of the market as the ongoing speculative behavior was hampering the market operations.
The ABCON boss linked the continued fall of the naira at the parallel market and Investors’ and Exporters’ (I&E) Forex window to currency speculators who are hoarding dollars to profit from the currency crisis.
He said the perpetrators are creating an artificial scarcity of the greenback within the market to cause more woes for the local currency.