The Association of Bureaux de Change Operators of Nigeria (ABCON) has commended the Central Bank of Nigeria (CBN) for recalling Bureaux De Change (BDCs) into the mainstream forex market, attributing this decision as a key factor in the ongoing stabilization of the exchange rate.
Dr. Aminu Gwadabe, President of ABCON, stated in a released statement that alongside monetary policy adjustments such as interest rate hikes and increased investment in government instruments, the reintegration of BDCs has notably enhanced dollar liquidity at the retail level of the forex market.
Gwadabe expressed ABCON’s appreciation to the CBN under the leadership of Cardoso and other relevant agencies for acknowledging BDCs as a vital component of the foreign exchange market and an effective mechanism for exchange rate transmission.
According to Gwadabe, the reintegration of BDCs has not only eliminated illicit economic practices like hoarding and round-tripping but has also facilitated exchange rate convergence.
He highlighted the positive ripple effects of exchange rate stability, noting reductions in the prices of international school fees by 15%, medical tourism costs by 20%, and airfares for local and international trips by 25%.
Gwadabe underscored that the current developments in the forex market have begun to curb inflation, with prices of essential goods and services becoming more affordable. Moreover, he emphasized that the stability in the exchange rate has bolstered public confidence in the local currency, reducing currency substitution behaviour.
In a significant update, Gwadabe revealed that the naira traded at N1,255/$ on Saturday, lower than the advised rate of N1,269.765 for BDCs.
Describing the ongoing market progress as revolutionary, Gwadabe emphasized that a stable naira would attract more foreign portfolio inflows, further bolstering the economy.
He lauded the CBN’s recognition of the pivotal role played by BDCs in securing exchange rate stability, highlighting the cessation of previous practices where Nigerians in Dubai brought dollars home for high rates due to the rapid recovery of the naira against the dollar.
Looking ahead, Gwadabe expressed optimism about the prospects for forex earnings, citing rising foreign portfolio investments and recent inflows of over $1.5 billion following the Monetary Policy Committee’s interest rate hike.
He urged continued collaboration between BDCs, the CBN, and other stakeholders to sustain the positive trajectory in the forex market, emphasizing the importance of maintaining a conducive environment for market stability and liquidity.
Gwadabe reiterated ABCON’s commitment to collaborating with the CBN to ensure the inclusion of all members in achieving mutually beneficial outcomes, thereby safeguarding investments, harnessing the skills of BDC operators, and fostering employment within the financial services sector.
