Following the economical crisis and level of hardship in the country, the Association of Bureaux De Change Operators of Nigeria has pleaded to the Central Bank of Nigeria to reduce its applicable exchange rate below the N1,251/$ it pegged for its members.

Aminu Gwadabe, the ABCON National President, said this in a letter to the CBN Director, Trade & Exchange Department.

The appeal comes when the parallel market rate of 1,235/$ is lower than the BDCs’ applicable buying exchange rate of 1,251/$ (plus a 1.5 percent margin) set by the CBN in its latest tranche of interventions.

Gwadabe emphasized that the naira’s fast recovery made CBN’s selling rate to BDCs very high and it’s difficult to offload to retail end buyers, who were going to the undocumented forex operators for cheaper rates.

He also showed concerns that many BDCs, who funded their accounts for dollar allocations, were yet to receive their allocation of dollars to meet the legitimate critical demand of their clients due to scrutinisation of the BDCs’ documents for collections at the various designated centres, and this had made the BDCs vulnerable to exchange rate risk and significant losses.

“We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$ with a margin of 1.5 percent are yet to receive their disbursement. This is happening in the face of the prevailing open market rate of N1,235/$, which is lower than the authorised applicable exchange rate by the CBN to the BDCs,” the letter said.

ABCON lauded the CBN leadership for BDCs into the official FX window and steps taken by the apex bank to strengthen the naira against the dollar and other global currencies.

ABCON president stated that the positive fallout of the CBN’s efforts to strengthening naira’s faster than expected, stressed its commitment to work with the apex bank to realise the objectives of the government towards exchange rate stability and economic growth.

“It is in view of the above market developments that we write to appeal to your good selves for readjustments and review downwards of our funding rate of the last tranche (2nd bidding) from N1,251/$ further down to reflect current market rate discovery.

“This became imperative as it is only the consideration of the readjustment downward that will enable our members to upload their holding positions,” he noted.

The association also stressed that the process of payments at the various disbursement centres be reviewed in the immediate time to a medium time automation to achieve enhanced timely payments while also observing the spot nature of transactions.

According to the group, the current open-ended system for payments and collection of bids does not make for effective administration and control of the process, adding that the apex bank should introduce a cut-off time for payments and collection of bids.

“Consequently, many of our members are jittery to bid/collect their bid for fear of losing money as the current market reality has the potential to force us to sell below cost price and antithetical to recent market price discovery,” it noted.