Forex: ABCON bans street hawking and plans to cut rates
The Currency Exchange Operators Association said it would start what it called “Operation No Street Trading” to stop the peddling of currencies by BDC operators.
ABCON chairman Alhaji Aminu Gwadabe said it was part of the resolutions unanimously taken by BDC directors at the operators meeting Tuesday in Lagos.
A copy of the resolutions which was obtained by our correspondent on Wednesday said: “All traders must work together to bring down exchange rates in the market; street trading by BDC should be discouraged / banned and ABCON will start the “no street trade” operation.
“BDCs should improve returns to regulators; review of margins to meet operational requirements; broaden the scope of transactions; digitalization of BDC operations.
“ABCON to punish the members of the commission; ABCON’s compliance officer and staff will begin overseeing BDC operations nationally.
The punch had exclusively reported on Saturday that BDC operators obtained the US dollar from the Central Bank of Nigeria at 393 naira but sold it for 494 naira on Friday.
Bank sources had revealed that the CBN provided $ 10,000 to each of the BDCs twice a week.
The country’s currency was recently devalued after the CBN adopted the NAFEX rate of N410 / $ 1 as the official exchange rate.
ABCON in a statement Sunday advised currency users and the general public to only patronize CBN-approved BDC operators in order to obtain dollars at the approved rate.
Gwadabe said parallel market activities had for years become the main drivers of exchange rates, adding that monitoring these transactions had become a burden.
He said forex speculators were taking advantage of the state of the forex market and the naira to sell dollars above the CBN-approved margin.
Gwadabe said CBN licensed BDCs do not sell dollars to end users above the N2 per dollar margin set by the regulator to protect the naira from forex speculators and ensure the stability of the exchange rate. exchange.
A professor of economics at Babcock University and former chairman of the Chartered Institute of Bankers of Nigeria, Professor Segun Ajibola, said there was a need to redefine, re-examine and restructure the entire ownership, operations and everything that had to do with operations. of BDCs in Nigeria.
He said, “To say that there are unlicensed BDC operators is very boring to hear. Where do illegal BDC traders get their forex?
“If there are illegal BDC operators, which we have been hearing about for ages, it will be enough for regulators to take a bold step to close their stores within 24 hours.”
He added, “I have never seen the type of forex traders peddling dollars on the streets, even in other African countries that I have visited. Why are they in business in Nigeria? We have had a lot of laws declaring street vendors illegal. So why are they still in business?
“Unless we regulate all of these market segments, we will not be able to manage our forex well in this country. It takes political will, strong determination and courage on the part of regulators to do all of this. ”
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