Kwara Bureau De Change operators appeal to CBN for reversal of forex policy

Date: 2016-01-18

Bureau De Change operators in Kwara State have called on the Central Bank of Nigeria to reverse its ban on forex sales to BDCs, which is taking on their businesses.

The CBN had stopped, with immediate effect, the sale of foreign exchange, forex, to Bureau de Change, BDCs, as part of measures to reduce the pressure on the nation's foreign reserves.

The Governor of the CBN, Mr. Godwin Emefiele, who announced the policy change in Abuja, said BDCs are now to source forex from the autonomous market. Before now, the CBN was selling $60,000 to each BDC weekly, translating to $167 million weekly and about $8.6 billion yearly. The amount was reduced to $10,000 per BDC, translating into $28.4 million depletion of the foreign reserve per week and $1.476 billion per annum.

Speaking with Pilot Business on Friday, the BDC operators pointed out that the policy has not achieved its objective as naira has continued to fall against the dollar.

"The only challenge we are facing is that since CBN stopped selling the dollars to BDCs, the demand has risen astronomically against supply. "Our customers are coming to do transactions but the dollar is not available and this has chased many operators out of business.

Similarly, another operator, Alhaji Samaila Musa said " we want the apex bank to reverse the policy by supplying BDCs dollars as the only way for the dollar to fall against the naira. "Even if it is N50,000 that CBN can give us weekly, this will be appreciated. This is because the dollars can't fall when the demand is high."

Another operator, Alhaji Tijani Maina stressed that "CBN has done its worst. We're all running, chasing an elusive dollar. We have travelled that road before and know it will only worsen the bad situation we are facing today,"

"The CBN cannot justify its actions because we control less than five per cent of the forex market value. Whatever imperfection is in the market, it is a wrong approach for the CBN to say it will no longer fund BDCs."

Continuing, he said the BDC is a market driven by demand and supply, adding that by reducing the dollar supply to the market, the naira will fall against the dollar within the next few months, unless the policy is reversed.

According to Olalekan Mohammed operating at Emir's market 'Oja-Oba,' Ilorin, the CBN will learn the bitter truth about the roles of BDCs in the economy if the policy is not reversed.

He lamented that under Emefiele, the regulator has been treating BDC operators as if they add no value to the economy. He said: "Let's wait and see how the market will allocate forex without BDCs. Let's see if banks that have severally been blamed for round-tripping will do it more effectively than BDCs.

On his part, Alhaji Hassan Mustapha warned that the policy could lead to liquidation of majority of the BDC operators, job loss and more volatility in the forex market. He said "I am sure the policy shift will be temporary and they will come back to their senses unless there is a better strategy to sell to small forex users".

Source

 

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