The Association of Bureau De Change Operators of Nigeria (ABCON) has said that the reopening of the BDC window for foreign exchange, among others, would crash the prevailing spike in the exchange rate.
A trader changes dollars with naira at a currency exchange store in Lagos. REUTERS/Joe Penney
Alhaji Aminu Gwadabe, President, ABCON, said this while speaking to the News Agency of Nigeria (NAN) on Sunday in Lagos.
“The immediate thing to be done to crash the rate is the reopening of the BDC window for school fees payments pending when the international Air travels resumes,” Gwadabe said.
Gwadabe said that BDCs have always been the medium and bridge for availability of liquidity in the retail end sector.
The ABCON chief noted that the proximity of BDCs to genuine FX end users ensured exchange rate stability in the market.
“The germane role of BDCs is bridging the gap between the official rates and the parallel market rates, which was achieved from early 2017 to early 2020,” Gwadabe said.
While appreciating efforts by the CBN in ensuring stability in the exchange rate, ABCON said that the factoring of BDCs into the FMDQ floor and Diaspora remittances agencies would ensure long term exchange rate stability in the economy.
The regular interventions at the foreign exchange market are also affected by low proceeds accruing from the sale of crude.
Diaspora remittances before the COVID-19 pandemic had also helped in boosting liquidity at the FX market.
However, a World Bank report has projected that remittances to Nigeria, Egypt, Senegal and other Low and Middle-income Countries (LMICs) would drop sharply by 19.7 per cent to $445 billion in 2020 due to the economic crisis induced by the COVID-19 pandemic and lockdown.
The report noted that the decline would be the sharpest in recent history and was largely due to a fall in the wages and employment of migrant workers that were more vulnerable to loss of employment and wages during an economic crisis in a host country.