ABCON says N386/$ new exchange rate not sustainable

ABCON says N386/$ new exchange rate not sustainable

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

According to him, funding of transactions for disbursement would commence in four zones of the country, starting from September 4.

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The ABCON president 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.

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, he said.

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

“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.”

Gwadabe citing the example of other countries where BDCs enjoyed up to six per cent margin per dollar, 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.

“We have Lagos, Abuja, Kano and Awka Zones. These are our four service providers, and in Port Harcourt, the travelex are back; they are the ones to dictate the disbursement of foreign currency to our members in the zone.

“So we are happy to announce to CBN that our waiting areas are ready and we are engaging the payment service providers in all the five payment services areas to ensure we have smooth operations.”

The ABCON boss said as part of readiness to resume operations, the association had introduced a queuing management systems called ‘360 QMS’ to allow members work virtually from the comfort of their homes.

He disclosed that about 4,000 members are already on the platform.

Other COVID-19 preventive measures like wash-hand basins, hand sanitisers and face masks had also been provided to members before they kick start operations in Monday, he said.