BDC Operators Cries Out Amidst Looming Dollar Scarcity as Exchange Rate Falls Below 900 Naira/ Dollar

On Wednesday, August 23, the naira lost against the dollar at the parallel market causing it to fall to N900/$.

This fall is coming barely after the naira was sold to the dollar for N960 at the black market. Recently, the naira has seen a significant boost as it traded N850 in recent days, not until Wednesday when it went back to the downward trend as the black market witnessed a shortage in dollars.

• This week naira traded to the dollar 850-880/dollar.

But now it has seen a significant drop at the parallel market while it also saw a decrease at the Investor & Exporter window, I&E, to 773.42/dollar. It closed on Tuesday at the Investor & Exporter window, I&E, to 757.10/dollar.

With this, the CBN plans to revoke the operating license of Bureau de Change Operators, BDCs, who go against the commission guidelines.

Last week Friday, August 18, 2023, the CBN announced an operational mechanism for BDCs to trade Forex at almost the same rate as the Investor & Exporter Forex window.

On August 17, 2023, the apex financial institution issued to BDCs a directive titled, 'Operational mechanism for Bureau de Change Operators in Nigeria.'

It reads,

• The speed on buying and selling by BDC operators shall be within an allowable limit of -2.5 percent to +2.5 percent of the Nigerian exchange market window weighted average rate of the previous day.

• Mandatory rendition by BDC operators of the statutory periodic reports (daily, weekly, monthly, quarterly and yearly), on the financial institution forex rendition system which has been upgraded to meet operators' requirements.

How BDC Operators Are Reacting - According to Punch

PUNCH reports that Bureau de Change Operators in Lagos, Kano, and Abuja sold the dollar between 895/$ and 905/$ on Wednesday.

• A BDC operator at the Lagos airport, who simply identified himself as Sanusi Ibrahim told The PUNCH that “We bought and sold the naira today at 890/$ and N900/$.”

• At the Central Business District in Abuja, a BDC operator, Yusuf Kareem, said, “The dollar is still scarce. We sold it for N900 today.”

• At the Allen Avenue Ikeja, Lagos, Alhaji Gambo Aliu, a currency dealer said he told the greenback at 905/dollar.

What the President of Bureau de Change Said: At a sensitisation engagement between the CBN and our compliance officers across the zones, the apex bank reiterated that by 31st of August, 2023, any operator that breaches its circular on the allowable margin of -2.5 per cent and +2.5 per cent on average weighted rate of I&E closing rate, rendition of returns and payment of penalties, risks the revocation of the operating license.