Bureaux de change and the economy.

The Association of Bureaux de change (BDCs) Operators of Nigeria (ABUCON) called its 3,500 CBN-licensed members to an emergency meeting the other day and complained about low transaction margin as it revealed that BDCs buy forex from the Central Bank of Nigeria, CBN, at N358/$1 but are required to sell at N360/$1. ABUCON bemoaned challenges such as losing many forex users, who choose to obtain personal and business travel allowances, medical bills and school fees payment abroad through banks or, where they prefer non-documentation, through the parallel forex market. The association then claimed that BDC operators were incurring losses and “may go underground unless CBN listens to their demands.” It is unclear if that was a threat for members to swell the ranks of parallel forex market speculators.

Presenting what seemed to be a set of options rather than take-all or leave-it package, ABUCON demanded from the CBN among other things (a) reduction of BDC forex buying rate to N350/$1 together with the selling rate of N355/$1; (b) fixing of BDC commission at 3.5 per cent of transaction volume; (c) the same forex selling rate to banks and BDCs; and (d) access of BDCs to increased sources of forex by purchasing export proceeds. ABUCON urged members to install necessary equipment in order to directly access dollar funds from International Money Transfer Service Operators (IMTSO). Justifying its demands on grounds that BDCs contribute to reduction of the national unemployment rate, the association pledged to transparently support the apex bank’s monetary and exchange rate policies in cognisance of their being aimed at national economic development.

By The Editorial Board.

Full story at The Nigerian Guardian.