CBN inconsistent dollar supply holding down naira recovery – BDC operators

Lack of consistency in dollar allocation to the Bureau De Change (BDC) operators by the Central Bank of Nigeria (CBN) is stampeding naira recovery, currency traders have submitted.

They equally noted that lack of continuity or frequency of the exercise gives rise to a loss of confidence in the forex market by the customers thereby putting pressure on the parallel market.

The BDC operators had advocated for the intervention by the CBN in the retail end of the market to be at least once or twice a week.

The CBN on July 18, 2024, approved the sales of $20,000 to Bureau De Change (BDC) operators at the rate of N1450/dollar as part of efforts to address forex scarcity, especially at the retail end of the market and strengthen the naira.

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Despite the CBN’s intervention in the forex market, the exchange rate is still high and volatile with the dollar trading at N1590 at the parallel market.

The President of ABCON, Aminu Gwadebe, noted that the lack of consistency in the exercise has led to the persistent volatility of the forex market with demand pressure and the weakening of the naira.

Gwadebe said, “The problem is the streamlining, only once, is it on the 18th of July or so? Like you said about 3 weeks, till now not any sales again.”

On how often the apex bank to be selling dollars to the currency traders, the ABCON President said, “Every week, you know there was a time we were collecting three times a week, we want it sometimes twice a week, but even if it is once a week with frequency and volume and in line with cut-off time, so that will make everybody go to the market at the same time and the liquidity will come to the market at the same time.

“But if I know the window is open for one month for me to buy and with no cut-off time and then I am not sure when it will come again, people will not be encouraged to really come into the market.”