Business

Forex: BDC operators speak on why naira has failed to recover

Forex: BDC operators speak on why naira has failed to recover

Bureau De Change (BDC) operators in Nigeria have raised concerns over the Central Bank of Nigeria’s (CBN) inconsistent dollar allocations, which they believe are impeding the recovery of the naira. The operators pointed out that the lack of regular and predictable dollar supply from the CBN is causing a loss of confidence in the foreign exchange (forex) market, leading to increased pressure on the parallel market.

To alleviate the forex scarcity, the CBN had approved the sale of $20,000 to BDC operators at a rate of N1450 per dollar on July 18, 2024. This measure was intended to strengthen the naira, particularly in the retail segment of the market. However, despite this intervention, the exchange rate remains high and volatile, with the dollar trading at N1590 in the parallel market.

Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria (ABCON), noted that the inconsistency in the CBN’s dollar supply has contributed to ongoing volatility in the forex market. He emphasized that the lack of frequent interventions has increased demand pressure and further weakened the naira.

READ ALSO:

“The problem is the streamlining, only once, is it on the 18th of July or so? Like you said, about three weeks, till now, no sales again,” Gwadebe remarked, highlighting the sporadic nature of the CBN’s interventions.

Gwadebe called for the CBN to engage in more frequent dollar sales to currency traders. He suggested that sales could occur once or twice a week to ensure a more stable and predictable flow of dollars into the market. According to him, regularity and volume, coupled with a clear cut-off time, would encourage market participants to engage more confidently, thereby improving liquidity and stabilizing the exchange rate.

“But if I know the window is open for one month for me to buy and with no cut-off time, and then I am not sure when it will come again, people will not be encouraged to come into the market,” he explained, stressing the need for consistency in the CBN’s forex interventions.

Forex: BDC operators speak on why naira has failed to recover

Trends Admin

Recent Posts

Adeleke presents staff of office to new Owa-Obokun amid protest

Adeleke presents staff of office to new Owa-Obokun amid protest ILESA — Osun State Governor, Ademola…

32 minutes ago

Air Canada flight partially catches fire after rough landing

Air Canada flight partially catches fire after rough landing A potentially disastrous situation unfolded at Halifax…

41 minutes ago

2027: Why PDP shouldn’t field northern presidential candidate – Ex-Atiku campaigner

2027: Why PDP shouldn’t field northern presidential candidate – Ex-Atiku campaigner A chieftain of the Peoples…

51 minutes ago

Paris-bound businessman excretes 74 wraps of heroin, cocaine at Abuja airport

Paris-bound businessman excretes 74 wraps of heroin, cocaine at Abuja airport Operatives of the National Drug Law…

1 hour ago

Israeli forces order new evacuation at besieged northern Gaza

Israeli forces order new evacuation at besieged northern Gaza CAIRO: Israeli forces carrying out a weeks-long…

1 hour ago

Police rescue 13 kidnap victims, arrest five suspected robbers

Police rescue 13 kidnap victims, arrest five suspected robbers Police Rescue 13 Kidnap Victims in Lagos…

1 hour ago