Bureau De Change (BDC) operators in Nigeria seem to be losing out in the latest foreign exchange policy set by the Central Bank of Nigeria (CBN). This policy has seen the naira appreciate to a record high of 1 USD to N380 since February 2017.
This development follows the disparity in exchange rate between the International Money Transfer Operators (IMTOS) and the banks. In response to this the Central Bank of Nigeria (CBN) has pledged to intervene soonest.
The BDCs buy the naira at the rate of N381 per dollar from the IMTOs and now re-sell it as low as N390 to one US Dollar.
The Central Bank of Nigeria (CBN) has been intervening in recent weeks to save the Naira which was exchanged at 520 Naira to the dollar as at February 2017. The CBN devalued the naira for retail customers to N375 per USD.
Aminu Gwadabe who is the acting president of the Association of Bureau De Change Operators of Nigeria (ABCON), told reporters that licensed BDCs were to incur regulatory losses of N130 million for this week dollar allocation.
This he said was as a result of disparity in the applicable exchange rates among players in the market. “The insistence of the public not to buy dollars for allowable invisible transaction above the N375/$ from the BDCs and a rate that is lower for the BDCs purchasing rates of N381/$ is part of the challenges facing the BDCs,” he said.
However, analysts at Afrinvest Securities Limited said with rates converging towards the N375/$ retail intervention rate, the apex bank may be eyeing unified FX rates at N380/$ – N370/$ before cutting intervention to give way for a well-functioning interbank market. Nonetheless, this remains unlikely in the interim given the absence of the political will and overarching implication of this on price-level and public welfare.