The recall of Bureau De Change operators (BDCs) into the mainstream forex market is a major factor in the current stability being experienced with the exchange rate.
The Association of Bureau De Change Operators of Nigeria (ABCON) said this in a statement released by the ABCON President, Aminu Gwadebe, at the weekend.
Gwadebe said aside monetary policy tightening that led to increase in exchange rate, more investment in government instruments, and the clearance of $7 billion forex backlog forward commitments, the recall of the BDCs was also a significant move by the apex bank to boost dollar liquidity at the retail end of the forex market.
The ABCON President expressed the association’s gratitude to the Cardoso-led CBN and other related agencies for the recognition of BDCs as the third leg of the foreign exchange market and an effective exchange rate transmission mechanism in forex management.
According to him, “The reconsideration of the BDCs into the mainstream foreign exchange market has not only demystified illegal economic behaviours of hoarding, rent-seeking, round tripping and FX holding position, and led to the emergence of exchange rate convergence.’’
He pointed out that the stability in the exchange rate had begun to impact prices of goods and services positively.
Describing the ongoing market development as revolutionary, he said stable naira will attract more foreign portfolio inflows to the economy.
Gwadabe said the naira has appreciated from February low of N1,915/$ to N1,255/$ representing N660 gains for the naira, which is significant by all measures.
The ABCON boss noted that going forward, the prospect of forex earnings is promising, with foreign portfolio investments on the rise and over $1.5 billion inflows recorded a few days after the Monetary Policy Committee (MPC) raised interest rate by 200 basis points.
‘’We call therefore on the CBN to continue to calibrate the existing relationship between the BDCs and the apex bank to sustain the success story’’ he said.
In response to the recent reforms in the financial industry, ABCON reiterated it’s resolve to continue to collaborate with the CBN to carry all its members in achieving a win win situation.
Source: Nairametrics