The Association of Bureaux de Change Operators of Nigeria (ABCON) has lauded the Central Bank of Nigeria (CBN) for its recent decision to resume dollar sales to Bureaux De Change (BDCs). This move has been hailed as a significant step towards boosting dollar liquidity at the retail end of the foreign exchange market.
In a statement issued by ABCON President, Dr. Aminu Gwadabe, the association expressed its appreciation to the leadership of the CBN, led by Governor Cardoso, and other relevant agencies for recognizing the pivotal role of BDCs in the foreign exchange market. Dr. Gwadabe highlighted the positive impact of the CBN’s decision, noting that it has helped to demystify illegal economic behaviors such as hoarding, rent-seeking, round-tripping, and FX holding positions.
According to Dr. Gwadabe, the inclusion of BDCs in the mainstream foreign exchange market has led to increased exchange rate convergence, resulting in greater stability in the forex market. This stability, in turn, has had a ripple effect on various sectors of the economy, with tangible benefits already being observed.
One of the notable impacts of the exchange rate stability highlighted by Dr. Gwadabe is the reduction in the prices of goods and services. For instance, international school fees have reportedly decreased by 15 percent, while the cost of medical tourism has seen a reduction of 20 percent. Additionally, airfares for both local and international trips have dipped by 25 percent, making travel more affordable for Nigerians.
Dr. Gwadabe also pointed out that the success story extends to the exchange rate itself, with the naira trading at N1,255/$ on Saturday, a rate even lower than the N1,269.765 rate at which BDCs were previously advised to sell. This demonstrates the positive impact of the CBN’s intervention in the forex market, leading to a more favorable exchange rate for Nigerians.
Describing the ongoing market developments as revolutionary, Dr. Gwadabe emphasized that a stable naira will attract more foreign portfolio inflows to the economy. This, in turn, will contribute to economic growth and stability, as increased foreign investment will stimulate various sectors of the economy and create employment opportunities for Nigerians.
The CBN’s decision to resume dollar sales to BDCs comes amidst efforts to address forex liquidity challenges and promote exchange rate stability. By recognizing the role of BDCs as an effective exchange rate transmission mechanism, the CBN has taken a proactive step towards enhancing liquidity and promoting transparency in the forex market.
ABCON’s commendation of the CBN’s decision underscores the importance of collaboration between regulatory authorities and market participants in achieving sustainable economic growth and development. Moving forward, continued cooperation between the CBN and stakeholders in the forex market will be essential in maintaining stability and fostering confidence in Nigeria’s economy.
