Forex traders and Bureau De Change operators (BDC) have rejected the new Central Bank of Nigeria (CBN) policy mandating them to sell foreign currencies at the same unified prices being traded at the Investor and Exporter forex window. The apex bank called this policy the operational mechanism for this segment of the market to trade foreign currencies in the country.
Recall earlier report that the Apex bank directed all BDCs operators in the country and the general public to trade foreign currencies at similar rates obtainable on the Investor & Exporter forex window.
CBN Directive to Bureau De Change Operators to sell forex at similar rate with Investor and Exporter forex window Rejected
The new directive was contained in circular number TED/FEM/PUB/FBC/001/007 dated August 17, 2023, titled, ‘Operational mechanism for Bureau De Change operations in Nigeria’, which was made available to newsmen on Friday.
The Central Bank of Nigeria had announced operational mechanism for the Bureau De Change segment of the market to trade foreign currencies at similar rates obtainable on the Investor & Exporter forex window.
It gave the directive to all BDCs and the general public in a circular number TED/FEM/PUB/FBC/001/007 dated August 17, 2023, titled, ‘Operational mechanism for Bureau De Change operations in Nigeria’, released on Friday.
The apex bank said in the circular signed by the Director, Trade & Exchange Department, Dr. O.S. Naji, that its implementation should be with immediate effect.
It said this was in support of the drive to improve the efficiency of the Nigerian foreign exchange market.
The circular stated, “The spread on buying and selling by BDC operators shall be within an allowable limit of -2.5 per cent to +2.5 per cent of the Nigerian exchange market window weighted average rate of the previous day.
“Mandatory rendition by BDC operators of the statutory periodic reports (daily, weekly, monthly, quarterly and yearly), on the financial institution forex rendition system which has been upgraded to meet operators’ requirements.
“Operators are to note that with effect from the date of this circular, non-rendition of returns would attract sanctions which may include withdrawal of operating licence. Where operators do not have any transaction within the period, they are expected to render nil returns.
“Please, be guided accordingly and ensure compliance.”
The order by the Central Bank of Nigeria was to commence instantly but have now been rejected by the Bureau De Change operators claimed they cannot sell their scarce forex at the same or similar prices been traded at the investor and exporter window..
Figures from the FMDQ showed that the naira commenced trading on the I&E window at 761.82/$ before closing at 739.52/$ on Friday.
Reacting to the development, a BDC operator who spoke to the Punch Newspaper said, “We bought and sold dollars for 840/$ and 865/$ today. CBN is not giving us the dollar, and I did not get it cheap at the official rate so I cannot sell at that rate.
“How many people have access to that official rate; the dollar is still scarce and expensive.”
Another BDC who would not want to be quoted also said, “The rate we sold today is 865/$. The implication of the new guideline is that if it pays to sell at the black market, I will not sell as a licensed operator.”
Meanwhile, the President, of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, said the new directive was in line with the financial reform for the industry with reference to the licensed BDCs operating the guideline.
Gwadabe said, “It is an anchor rate for them if a customer comes, then you look at what is the closing rate for the I&E window and you buy at the -2.5 per cent to +2.5 per cent; the same thing if a customer comes to you, you use the same I&E window.”
He noted that the CBN, through its intelligence report, had seen that there were BDCs that, even though they were not accessing the CBN window, they were also accessing the independent window and transacting.