Create special FX trading window for BDCs, ABCON tells CBN

The Association of Bureaux De Change Operators of Nigeria (ABCON) has asked the Central Bank of Nigeria (CBN) to establish BDCs’ autonomous foreign exchange trading window (BAFEX) with a determined maximum daily limit.

The association said it would enable eligible BDCs to access dollars from banks, autonomous markets, and diaspora forex widows at the prevailing market prices.

ABCON said this in a statement issued over the weekend at the conclusion of its national executive council meeting in Lagos.

Speaking at the meeting, Aminu Gwadabe, ABCON president, said the creation of the BAFEX window is one of the strategies that the association came up with to save the naira from further decline and enhance exchange rate stability.

Gwadabe said the depreciation of the naira against global currencies was due to pressure from rising dollar demand without sufficient liquidity to meet the demands from retail end users, manufacturers and other key players in the economy.

The ABCON boss also requested for enhancement of existing BDCs’ automation portals to file transaction returns on CBN/ABCON/NFIU/NIBSS portals for effective regulatory monitoring and supervision.

He sought the creation of an automation portal to encourage the registration of undocumented and unlicensed operators for effective monitoring, identification and tracking of their transactions.

The president said the reluctance of the CBN to open new windows through which foreign exchange can be attracted to the economy remains a key factor in the naira’s continued fall.

He said there is an urgent need to review the guidelines on BDC’s scope of operations to include participation in payment space, such as agency banking, point of sale (PoS) services, inbound and outbound forex transfers, ATM forex services, to reflect the global business model practice.

Gwadabe said ABCON developed multiple applications for BDCs’ transformation from being CBN cash dispensers to globally competitive entities with the capacity to attract foreign capital flows to the economy.

“We support any measures that would lead to compliance with the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), supporting CBN’s exchange rate stability policies and security agencies to punish any BDC operator breaching corporate governance and compliance guidelines,” he added.

“It is our sincere belief that the BDCs need to be integrated back officially to ensure their continuous potent role in exchange rate stability management.”

Following the apex bank’s decision to stop the sale of forex to BDCs, ABCON has continued to make repeated calls for the restoration of the forex sale.

On Friday, the naira depreciated against the US dollar to close at N419/$ at the official market and N595/$ at the parallel market.