Nigeria’s local forex operators have appealed to the Central Bank to adjust and lower its applicable exchange rate below the N1,251/$ it pegged for its members, local media reports.
President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said in a letter on Monday that the naira’s speedy recovery made CBN’s selling rate to members very expensive and difficult to offload to retail end buyers.
The appeal comes as the parallel market rate of 1,235/$ is lower than the BDCs’ applicable buying exchange rate of 1,251/$ (plus a 1.5 percent margin) set by the CBN in its latest tranche of interventions.
Gwadabe expressed concerns in the letter that many BDCs, who funded their accounts for dollar allocations, were yet to receive their allocation of dollars to meet the legitimate critical demand of their clients due to scrutinization of the BDCs’ documents for collections at the various designated centres, Nigeria’s Punch News reports.
Open market rate
He noted that this had made the BDCs vulnerable to exchange rate risk and significant losses.
“We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$ with a margin of 1.5 percent are yet to receive their disbursement. This is happening in the face of the prevailing open market rate of N1,235/$, which is lower than the authorised applicable exchange rate by the CBN to the BDCs,” the letter said.
Despite this development, ABCON lauded the CBN leadership for the recall of BDCs into the official FX window and the steps taken by the apex bank to strengthen the naira against the dollar and other global currencies.
“It is in view of the above market developments that we write to appeal to your good selves for readjustments and review downwards of our funding rate of the last tranche (2nd bidding) from N1,251/$ further down to reflect current market rate discovery,’’ the letter added.
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