“We are making losses because of you” — Bureau de Change to CBN

The Association of Bureau De Change Operators of Nigeria (ABCON) has urged the Central Bank of Nigeria (CBN) to revise downwards the exchange rate applicable to Bureau De Change (BDC) operators, citing the current rate as costly.

This plea from the BDCs follows a notable development where, for the first time in 15 years, the parallel market rate of N1,235/$ is lower than the official rate of N1,252/$, which is the buying exchange rate set for BDCs.

In a letter addressed to the Director of the Trade and Exchange Department of the CBN, the Association of Bureau De Change Operators of Nigeria, President Aminu Gwadabe emphasized the rapid recovery of the naira, which has outpaced expectations.

This recovery has rendered the CBN’s selling rate to BDCs expensive and challenging to offload to retail end buyers who seek cheaper rates from informal forex operators.

ABCON highlighted concerns over delayed dollar allocations to many BDCs, hindering their ability to meet the legitimate demands of clients. The scrutiny of BDCs’ documents for collection at designated centers has exposed them to exchange rate risks and potential losses.

The association emphasized the significant income and capital losses faced by Bureau de Change operators who purchased dollars at N1,251/$ but are now compelled to sell at the current open market rate of N1,235/$, as the naira appreciates across markets.

Therefore, they advocated for a downward review of the applicable exchange rate to mitigate losses and ensure continued stability in the currency market.

In a statement, ABCON expressed concern over members who have paid for dollar allocations but are yet to receive disbursement, despite the prevailing lower open market rate compared to the authorized rate by the CBN.

The association’s call for a downward adjustment in the funding rate aims to align with current market realities and enable BDCs to sustain their operations without incurring losses.

Many members are hesitant to bid or collect bids, fearing financial losses due to the potential selling below cost price in the current market conditions.