BDCs consider harmonised retail market as naira depreciates further – Newstrends
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BDCs consider harmonised retail market as naira depreciates further

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2 weeks ago

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BDCs consider harmonised retail market as naira depreciates further

The Association of Bureaux De Change Operators of Nigeria (ABCON) has said it is working on establishing a unified retail end forex market operations to tackle volatility and boost regulatory compliance within the Bureau De Change (BDC) sub-sector.

This is as the value of the naira depreciated further at the parallel market to N1,450 to the dollar.

From N1,420 which it was on Thursday, the value of the naira, which had depreciated to N1309 to the dollar at the Nigeria Autonomous Foreign Exchange market (NAFEM) continued to fall at the parallel market.

ABCON president, Alhaji (Dr.) Aminu Gwadabe, said ABCON is carrying out strategic plans meant to unify operators from different cadres of the market including inauguration of state chapters for markets coordination, integration and administering a united market structure.

According to him, ABCON plans to extend its automation policies and platforms to all BDC operators across Nigeria markets and upgrade its Business Process Platform-(formerly called SAAZ Master). He said the new blueprint for a united retail end forex market structure will ensure the deployment of a centralised, democratised and liberalised online real time trading platform.

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He stated that the association will sustain its engagement with regulatory agencies, security operatives and other government apparatus to entrench a secured and thriving forex market that is supportive to regulation and government.

“Part of our vision for a united retail-end forex market include activating geo mapping and automated BDCs physical office verification exercise using the Remote Gravity Physical verification apps. This will enable forex buyers to easily locate where BDCs offices are for effective and seamless transactions”.

He reiterated the benefits of a realistic and vibrant retail end forex market as supporting Central Bank of Nigeria (CBN’s) goal of achieving true price discovery for the naira, balancing of international obligations and national objectives; ensuring ease of regulation, security agencies monitoring and supervision as well as entrenching market visibility for BDC players.

According to Gwadabe, the vision for a united retail end forex market will help in the provision of market intelligence reports, enhance the local and global image of the BDCs and other stakeholders, market operators and boost employment generation.

The successful execution of this plan, Gwadabe said, will help in seamlessly capturing revenues for the government through digitised retail end market and creating a well structured, transparent and competitive platform to checkmate the menace of unlicensed platforms like Binance, Aboki FX, ByBit among others.

BDCs consider harmonised retail market as naira depreciates further

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Naira drops further to N1,421.06 per dollar

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20 hours ago

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May 9, 2024

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Naira drops further to N1,421.06 per dollar

The declining fortunes of the Naira persisted yesterday with further depreciation in the parallel and official markets due to the re-emergence of speculation and hoarding, even as some Bureaux De Change, BDCs withdrew from the Central Bank of Nigeria, CBN’s, dollar sales program.

Vanguard also learnt that despite the sustained nationwide raids and arrest of street currency hawkers, the Naira further depreciated yesterday to N1,435 per dollar in the parallel market, from N1,415 per dollar on Tuesday, and also depreciated to N1,421.06 per dollar in the Nigerian Foreign Exchange Market, NAFEM.

Data from FMDQ showed that the indicative exchange rate for NAFEM fell to N1,421.06 per dollar from N1,416.57 per dollar on Tuesday, indicating N4.49 depreciation for the naira.

Consequently, the margin between the parallel market and NAFEM rates widened to N13.94 per dollar from N1.57 per dollar on Tuesday.

Dollar sales to BDCs

In a bid to intervene in the retail segment of the forex market, the CBN in February resumed dollar sales to BDCs. Since then the apex bank has held three editions of the dollar. At the last edition, the CBN offered to sell $10,000 per BDCs at directing them to sell at the maximum margin of 1.5 per cent.

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BDC operators however complained dollar disbursement from CBN is too slow that and takes three to four weeks between when they make payment and when the dollars are disbursed to them.

Vanguard reliably gathered that as a result of this delay and the uncertainty in the forex market, some BDCs, have asked the CBN to refund their Naira payment.

Top BDC operators who confirmed this development to Vanguard under the condition of anonymity said that some of the BDCs that asked for refunds have gotten their money.

Speaking to Vanguard on condition of anonymity, the Chief Executive of a BDC said, “I think the CBN is overwhelmed. You pay money and it takes one month for you to collect $10,000. It is over a month now since they intervened and they have not intervened again.

“Even the last one that they did some BDCs are just collecting the dollars. Some are even saying they should return their money. They are asking for a refund because there are many challenges. Some have paid but their name is appearing in another location which makes it impossible to collect the dollars. Some are getting their refund but it is a very slow pace too.”

Also speaking on condition of anonymity, another BDC operator said, “There is no supply. The CBN supply is slow. They sell one tranche for one month. It is too low. If they don’t have the money they should tell us we don’t have the money.”

Speculation reemerges

Vanguard investigations also revealed the reemergence of speculation and hoarding in the forex market due to the steady depreciation of the Naira in the last three weeks.

Speaking anonymously, a BDC operator said, “You know people are still doubtful. A lot of people now at any opportunity, buy dollars and keep, thinking that the rate will go up again. So speculation and hoarding are still happening.

“Before when people are scared, they bring out their dollars to sell. But now nobody is doing that. Supply is not coming into the market. There is no certainty about the frequency and volume of intervention from CBN. And this further encourages speculation and hoarding.”

Efforts for the CBN to respond to the above developments proved abortive as the Director, of Corporate Communication, CBN, Mrs Hakama Sidi-Ali, did not respond to calls and SMS and WhatsApp messages from Vanguard.

Naira drops further to N1,421.06 per dollar

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Naira trades at N1,415/$ on parallel market

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2 days ago

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May 8, 2024

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Naira trades at N1,415/$ on parallel market

The Naira yesterday depreciated to N1,415 per dollar in the parallel market, from N1,410 per dollar on Monday.

Similarly, the Naira depreciated in the Nigerian Foreign Exchange Market, NAFEM, to N1,416.57 per dollar.

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Data from FMDQ showed that the indicative exchange rate for NAFEM fell to N1,416.57 per dollar from N1,354.21 per dollar on Monday, indicating N62.36 depreciation for the naira.

Consequently, the margin between the parallel market and NAFEM rates narrowed to N1.57 per dollar from N55.79 per dollar on Monday.

Naira trades at N1,415/$ on parallel market

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CBN extends suspension of cash deposit charges by bank customers

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2 days ago

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May 8, 2024

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CBN extends suspension of cash deposit charges by bank customers

The Central Bank of Nigeria (CBN) has directed commercial banks to extend suspension of charges on cash deposit until September 30 this year.
This directive was conveyed through a circular dated May 6, signed by Adetona Adedeji, the Director of Banking Supervision at the apex bank.
The banks had reintroduced fees for deposits exceeding N500,000 for individuals and corporate account holders on May 1.

Following the banks’ decision, individuals were set to incur a two per cent charge on deposits exceeding N500,000, while corporate account holders faced the same levy on deposits surpassing N3 million.
The new circular read, “Please refer to our letter dated December 11, 2023, referenced BSD/DIR/PUB/LAB/016/023 on the above subject, suspending processing charges imposed on cash deposits above N500,000 for individuals and N3,000,000 for corporates as contained in the ‘Guide to Charges by Banks, Other Financial Institutions and Non-Bank Financial Institutions’ issued on December 20, 2019.
“The Central Bank of Nigeria hereby extends the suspension of the processing fees of two per cent and three per cent previously charged on all cash deposits above these thresholds until September 30, 2024.”

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