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| Understanding the Naira's Depreciation: Factors and Calls for Digital Transformation in Bureaux De Change Operations |
The Nigerian naira's value continued its downward trajectory, reaching an exchange rate of 980 naira to the US dollar in the parallel market on Wednesday. Just a week prior, the exchange rate stood at 950 naira to the dollar. This depreciation in the naira's value was primarily attributed to a shortage of foreign currency, as reported by Bureau de Change operators interviewed by The PUNCH.
Idris Musa, a BDC operator, stated, "Today, we bought and sold the naira at rates of 965 naira to the dollar and 980 naira to the dollar, respectively. The dollar is scarcely available." Yusuf Kareem, another BDC operator, expressed uncertainty about the future trend, saying, "The dollar was traded at 980 today, and we cannot predict whether it will rise further or potentially decrease."
In contrast, at the Investor & Exporter forex window on the FMDQ, the naira experienced a slight appreciation, closing at 770.71 naira to the dollar on Wednesday, up from 776.76 naira on Tuesday.
The Association of Bureaux De Change Operators of Nigeria (ABCON) recently called upon the Central Bank of Nigeria to grant Bureaux De Change operators digital autonomy in an effort to achieve exchange rate convergence. Dr. Aminu Gwadabe, the President of ABCON, urged the central bank to provide a no-objection approval for BDCs to fully embrace digital operations in all aspects of their business.
Gwadabe emphasized that foreign currencies obtained by BDCs are derived from various sources, including private sources and the CBN window, based on CBN determinations, to facilitate purposes such as Business Travel Allowance, Personal Travel Allowance, school fees payments abroad, medical expenses, mortgage, personal home remittances, and subscription payments.
To ensure compliance, ABCON has trained compliance officers to ensure they are well-versed in their obligations, particularly regarding the monthly reporting of results and the tracking of illicit capital flows through compliance measures. Gwadabe also highlighted that BDCs were diligently adhering to reporting suspicious transactions, as mandated by NFIU, CBN, and EFCC directives. Furthermore, BDCs remain committed to complying with all relevant rules and regulations established by the CBN, with the central bank closely overseeing and monitoring their operations.
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