ABCON Advocates Bureaux De Change Participation for Stable Exchange Rates and Robust Forex Liquidity in Nigeria

In the pursuit of a stable, robust, and resilient exchange rate in Nigeria, the full participation of Bureaux De Change (BDCs) in the retail segment of the foreign exchange (forex) market is essential, according to Alhaji (Dr) Aminu Gwadabe, President of the Association of Bureau De Change Operators of Nigeria (ABCON).

Gwadabe asserted that, with the current leadership at the Central Bank of Nigeria (CBN), Nigeria possesses the necessary tools to achieve a strong and stable exchange rate while fostering a highly liquid forex market that bolsters the domestic economy.

He emphasized the necessity for unified efforts to address the challenges facing Nigeria’s forex market and the devaluation of the naira. BDCs, authorized to operate in the retail end of the forex market, should play an integral role in delivering a lasting solution to the ongoing exchange rate volatility.

Gwadabe stressed that the continued depreciation of the naira in both official and parallel markets is detrimental to BDCs and the domestic economy, underscoring the need to take action to reverse this trend and fortify the local currency for maximum economic impact.

Last week, the local currency experienced a new low, trading around N1,150/$1.0 in the parallel market and an average of N860/$1.0 in the official windows, attributed to persistent dollar scarcity and speculative activities by illicit forex traders.

Gwadabe acknowledged the sincere intentions of the central bank in implementing various measures to bridge exchange rate disparities. However, he emphasized that involving BDCs in the solution framework would yield the desired outcome of a highly liquid market with stable rates.

Gwadabe also pointed out that, like other segments of the market, illiquidity remains a significant concern for the BDC sector. In addition to market illiquidity, ABCON expressed dissatisfaction with unlicensed forex dealers who engage in speculative activities, tarnishing the sub-sector’s reputation.

ABCON can only continue educating the public against engaging with illegal forex dealers, as the suspension of its Self-Regulatory Organization status limits its ability to directly penalize these unauthorized operators.

He concluded that stringent enforcement of regulatory sanctions against non-compliance with guidelines should be swift and severe to act as a deterrent for erring members.

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