Illegal BDCs Manipulate Forex Market- Gwadabe

Alhaji Aminu Gwadabe, president, Association of Bureau de Change Operators in Nigeria, said unauthroised persons posing as Bureau de Change (BDC) operators caused irregular fluctuations in the parallel market.

This is coming after Godwin Emefiele, Central Bank of Nigeria (CBN) governor, had accused speculators and BDC operators of conniving to bring down the price of naira in the foreign exchange market.

Gwadabe said the recent decision of the CBN to stop the sale of foreign exchange to BDC operators made the business unsustainable to its members, thereby leaving room for unauthorised dealers to flood the market.

“People think that BDC operators are making a lot of money these days. But it’s not true. People do not understand that there are a lot of participants in the parallel market.

“I can authoritatively tell you that about 80 percent of all registered BDCs in the country have closed down since the CBN stopped the sale of dollar to BDCs.

“Right now, the unlicensed BDCs are currently more than the licensed ones all over the country. And their activities are not regulated because they are not registered.

“So right now, the market is in the hands of speculators and these unlicensed BDCs,’’ he said.

Gwadabe advised the CBN to come up with a robust, effective and efficient monitoring and supervision of all players in the market.

He also called on the CBN to audit big corporate institutions which he claimed had become major players in the foreign exchange market.

Gwadabe also confirmed that CBN had commenced the payment of about N96.5 billion to the 2,839 licensed BDC operators in the country.

He said the amount was part refund for their N35 million deposit at the CBN. He said, however, that the process was taking too long and the CBN should fast track it.

On a separate note, it was learnt that the CBN has taken measures to improve the value of naira at the parallel market.

It would be recalled that in recent times, the naira changed for N400 to a dollar and had been fluctuating between N300 and N395 ever since.

As at the time of filing this report, naira was changing for N315 to a dollar at the parallel market, and N197 to a dollar at the inter-bank rate.

An official of the bank, who pleaded anonymity, attributed it to the mop-up operations of the CBN which had reduced excess liquidity of Naira in circulation and made it relatively scarce.

“There was also the decision by CBN to maintain the supply of foreign exchange for school fees and medicals which earlier speculated removal from inter-bank rate eligibility had caused panic.

“Another reason is the rising cost and drop in demand for imported goods because a good number of Nigerians are beginning to switch consumption to local goods.

“These have had a significant fall in dollar demand,’’ the official said.