Bureau De Change (BDCs) operators are super excited with the Central Bank of Nigeria’s decision to recall them to mainstream FX market.
The elated Bureau de Change Operators believe that their return into the mainstream FX market will help stabilise the exchange rate.
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In a statement by the President of the Association of Bureau De Change of Nigeria (ABCON) Dr. Aminu Gwadabe, the association said the “monetary policy tightening that led to interest rate hike and more investment in government instruments are boosting the forex market”.
The Third Leg
According to him, the “clearance of $7 billion FX backlog by the Central Bank of Nigeria and the recall of the BDCs also significantly boosted dollar liquidity at the retail end of the forex market”.
Gwadabe was happy that the CBN recognised BDCs as the third leg of the foreign exchange market.
Also, he hinted that the BDCs were an effective exchange rate transmission mechanism in forex management.
“Recalling of the BDCs into the mainstream foreign exchange market has demystified illegal economic behaviours like hoarding, rent seeking, and FX holding position.
“It has also led to the emergence of exchange rate convergence.”
Furthermore, Gwadabe said that the stability in exchange rate already had positive impact on the prices of goods and services.
For instance, the price for international school fees has dropped by 15% and the cost of medical tourism reduced by 20%.
Also, the prices of air fares for local and international trips dipped by 25%.
He said: “The prices of most necessities are falling in the market because the foreign exchange market has started reigning in inflation.
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Gwadabe said the naira traded at ₦1,255/$ on Saturday, even lower than ₦1,269.765 rates BDCs were advised to sell.
Describing the ongoing market development as revolutionary, Gwadabe said that a stable naira would attract more foreign portfolio inflows to the economy.
He said the naira had appreciated from February low of ₦1,915/$ to ₦1,255/$ representing ₦660 gains, which was significant by all measures.
