Currency Traders Send Crucial Message to CBN as Access, Others Quote New Rates to Sell Dollars

Currency Traders Send Crucial Message to CBN as Access, Others Quote New Rates to Sell Dollars

  • Currency traders in Nigeria have asked the Central Bank of Nigeria (CBN) to reduce the buying rate it sells the dollar to them
  • The dealers said the current buying rate of N1.251 per dollar the bank sells to them does not allow them to make profits
  • The development comes as the naira appreciated at N1,247 per dollar from the N1,250 it traded the day before’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Association of Bureaux de Change Operators of Nigeria (ABCON) has asked the Central Bank of Nigeria (CBN) to reduce its buying rate for the US dollar to hasten recovery.

ABCON revealed that the N1,251 per dollar buying rate that the CBN pegged for the dealers would result in losses for its members, as the naira currently trades at N1,235 per dollar in the open market.

Read also

No more N1,251: Naira gains as CBN quotes new rate to sell dollar to BDCs

ABCON send message to CBN
CBN governor, Olayemi Cardoso and ABCON President, Aminu Gwadabe Credit: ABCON
Source: Getty Images

ABCON says members are running at a loss

The currency dealers disclosed this in a letter signed by ABCON President Aminu Gwadabe, addressed to CBN’s trade and exchange department director.

The apex bank recently announced the second phase of sales of Forex to BDCs at N1,251 per dollar.

The association said it is the first time that the buying rate for CBN will be higher than the open market value.

ABCON said:

“We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$ with a margin of 1.5% are yet to receive their disbursement. This is happening in the face of the prevailing open market rate of N1,235/$, which is lower than the authorised applicable exchange rate by the CBN to the BDCs.”

Read also

CBN readjusts Customs forex import duties as dollar crashes in all markets

TheCable reports that ABCON predicts that the naira will continue to appreciate across all forex markets due to the increasing sources of FX inflows caused by CBN policies.

The dollar currently sells at lower than CBN rates

The group also said its prediction for the ongoing market development shows its willingness to self-correct with realistic price discovery.

According to reports, the association begged the apex bank to review the current rate of N1,251 per dollar downwards to allow its members to upload their holding positions.

The group also asked for a review of the payment process at the different disbursement centres to medium-term automation to achieve enhanced timely payments due to the spot nature of its transactions.

It said the open-ended system for payments and collection of bids did not make or allow for effective administration and control of the process. It asked the CBN to introduce a cut-off time for payments and collection bids.

Read also

“Naira gains N660 against USD”: ABCON explains role of BDCs in boosting local currency

This development comes as the naira appreciated further in the parallel segment of the foreign exchange market, trading at N1,247 per dollar as against the N1,250 it traded on Thursday, April 4, 2024.

Customs to charge new rates for cargo clearance reported that in the past few days, the foreign exchange rates for the Nigeria Customs Service (NCS) cargo clearance in Nigerian ports have dropped to N1,260.49 per dollar from N1,330.

The new rate represents a decrease of about N70 for clearance, reflecting the closing rate on the official foreign exchange rate window on Friday, April 5, 2024, of N1,255 per dollar.

In the last two weeks, the exchange rate for import duty payments has decreased as the naira continues to appreciate against major currencies in the Forex market.


Online view pixel