New Telegraph

As CBN resumes sale of forex to BDCs…

After some gruelling hiatus, licensed Bureau de Change (BDC) operators are bound to resume business soon with last week’s promise by the Central Bank of Nigeria (CBN) to commence gradual sale of foreign exchange to them.

 

The move by the apex bank, which has done everything legally possible to stem speculation, would definitely gladden the hearts of the operators, who have waited with bated breath for this moment.

 

From the September 7 date promised by CBN, it is obvious that the commencement is coinciding with the date the Federal Government has marked down to open the nation’s airports to international flights. The apex bank said the move was part of efforts to enhance accessibility to foreign exchange particularly by travellers the moment the airspace is opened.

 

Far from being a hurried decision, recent developments in the forex market had seen the naira depreciating steadily against the dollar due obviously to scarcity and limited channels to access the green back.

 

Last week, for instance, the naira weakened against the dollar for the most part of the week as it sold at N477 against the dollar in the parallel market. Most part of two weeks ago, it appreciated slightly to N472 against the dollar in one of the days.

 

In the same vein, while the naira was valued at N615 against the British pound, it sold for N555 against the Euro up until Friday.

 

As much as the depreciation lasted, the monetary authorities for reasons best known to it felt the need to keep the suspense on until its decision to lift it as early as next week.

 

The CBN had in March suspended foreign exchange sales to the BDC operators following the lockdown occasioned by the coronavirus (COVID-19). As responsible operators, Association of Bureaux De Change Operators of Nigeria (ABCON) had earlier on written to the apex bank, recommending a halt in the weekly sale of forex to the BDCs.

 

Now that there is global ease on lockdown, we also align with the apex bank that it is important to resume sale of forex to the operators as the threat posed by COVID- 19, which necessitated the suspension in the first place, is gradually waning with life being injected into businesses.

 

We recognise the fact that what might have appeared as prolonged punishment for the forex dealers was in fact a decision taken to stem the spread of the pandemic as well as to control illicit forex flows at the height of the crisis and confusion.

 

It is also acknowledged that the relationship between the BDC operators and the management of CBN has been nothing but robust as it is established that the CBN has, for years, implemented friendly policies to deepen operations in the market.

 

Such policies stemming from the apex bank have brought stability to the BDC industry and helped operators to embrace automation, which is the standard best practice globally. With over 5,000 members nationwide fully behind and in support of various CBN measures to deepen and revolutionise the supply of foreign currency to the retail critical end user needs in the market, the BDC segment of the market will continue to support Nigeria’s growth agenda and CBN’s commitment to exchange rate stability.

 

No one is in doubt that ABCON, which is the umbrella body of the operators, has, through long years of training and guidance, strengthened the BDC sector and helped operators understand the gains of compliance to antimoney laundering issues.

 

The anti-money laundering training that ABCON organised with NFIU and EFCC in Lagos sometime ago was meant to familiarise BDCs with the process of money laundering – the criminal business used to disguise the true origin and ownership of illegal cash – and the laws that make it a crime.

 

With over $30.4 billion being ferried out of Africa annually, we have seen the group intensify its commitment to fighting money laundering and terrorist financing by ensuring that its members comply with regulations in doing their business, even as it is equipping its members with the right technology and skills to tackle illicit financial flows within the country.

 

Its sophistication in this regard is in no doubt as the leadership had in February launched its Live Run Automation Portal in Lagos; a technology that automates all BDC operations with those of Nigeria Inter-Bank Settlement System (NIBSS), Nigeria Financial Intelligence Unit (NFIU) and the CBN to improve the level of compliance of the BDCs with set regulations.

 

The platform allows BDCs send their reports online real time, thereby removing the challenge of manual rendition of reports that has been confronting operators for decades. The project is also boosting the perception towards BDCs in Nigeria, especially in the eyes of international investors.

 

The objective to ensure BDCs provide liquidity at the retail end of the market and also share intelligent information with government, whenever there is such information has never been in doubt, especially since the current management of CBN came on board.

 

As the forex dealers resume next week, we advise that the relationship between them and the apex bank remain robust as they ply their trade according to the rules governing their operations.

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