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N386/$ New Exchange Rate Not Sustainable, Says ABCON

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N386/$ New Exchange Rate Not Sustainable, Says ABCON

N386/$ New Exchange Rate Not Sustainable, Says ABCON
September 03
16:16 2020

The President, Association of Bureaux de Change Operators of Nigeria, Alhaji Aminu Gwadabe, has said that the new exchange rate for the operators to sell forex at N386 cannot sustain their operations.

He also said that funding of transactions for disbursement would commence in four zones of the country, starting from September 4.

Gwadabe spoke on Wednesday at a webinar with the topic, “Resumption of foreign currency sales to BDCs, COVID-19, challenges, compliance and way forward,” which was organised after the CBN announced it would resume forex sales to the BDCs.

He noted that the CBN was set to sell dollars to the BDCs at a fixed rate of N384 to the dollar and they were expected to sell to their customers at N386 to the dollar.

According to him, the BDC operators had said the profit margin was too small and would not be enough to cover their operating expenses.

He said, ““The challenge that we are facing is the smaller margin.

“Right now, the parallel market is doing about N430 and our pegged rate is N386 to the dollar.

“So, we still see a gap between the advised exchange rate of N386 by the CBN and what is obtainable presently in the market.”

Citing the example of other countries where BDCs enjoyed up to six per cent margin per dollar, Gwadabe said the N2 per dollar allowed by the CBN was not up to the three per cent margin previously allowed by the apex bank at the commencement of dollar sale scheme.

While discussing the distribution procedures in the new forex sales resumption, he said as an institution, it must observe some certain measures that were being played down by the government because of COVID-19.

He said, “The ordinary financial transactions or funding of transactions for disbursement will start this Friday in four zones.

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