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ABCON restates worries over forex rate deals with CBN

PHOTO:AFP

The Association of Bureau De Change Operators of Nigeria (ABCON) has expressed worries that the Central Bank of Nigeria (CBN) has continued to sell dollar to its members at N360/$1 while commercial banks buy at N357/$1.

The renewed concern came on the heels of the Bankers Committee meeting held in Lagos, last week, where CBN Director of Banking Supervision, Ahmed Abdullahi, reiterated that Bureau De Change operators will continue buy from CBN at N360 per dollar for “Invisibles”.

At the meeting, banks will continue to buy from CBN at N357 and sell at N360 for the same “Invisibles” demand, but now with no commission or charges whatsoever against the customer.

The President of ABCON, in a chat with journalists, said CBN should address this unfair price mechanism that is working against the interest of BDCs, adding that the group is also preparing to train its members on anti-money laundering compliance models that would enable them operate within regulation.

Raising concerns that their members may be forced out of the business by the challenge, he noted that the development might affect BDCs efforts to reach consumers and people resorting to parallel market.

He said that many forex users now prefer to buy at the parallel market instead of the BDCs since there are no longer rate gaps and there is no requirement for documentations there.

Gwadabe explained that banks and BDCs are selling the same products under the Invisibles segment- PTAs, BTAs, medicals and schools fees, hence an unfair advantage to differentiate the price.

But The Guardian’s analysis of the current Economic Report by the apex bank showed that BDCs are by far, receiving less of the entire interventions under the Invisibles segment.

For example, out of the total foreign exchange forwards disbursed at maturity, amounting to $2.80 billion or 55.1 per cent were directed to banks, while bureau de change sales and swap transactions were $1.19 billion or 23.4 per cent and $190 million or 3.8 per cent, respectively.

The operators have also complained that given the N2 margin allowed by the apex bank and the level of the weekly disbursements, they are no longer able to cover costs, which is currently forcing their members out of operations.

He said that his members have embraced the rules of operations, supported the regulator and are strengthening their compliance level through trainings, hence should be recognised.

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