It is a long-drawn battle and it has not been easy, even till now. That is not only the a good description of the many challenges that beset the foreign exchange market, but also the participants, particularly the licenced Bureaux De Change (BDCs). Of course, the Central Bank of Nigeria (CBN) recently made another move closer to realising the major issue of discord- multiple exchange rates and harmonisation. But it actually did, particularly with BDCs and their “competitor”- the Deposit Money Banks.
The CBN had earlier in the month, approved an upward review of the trading margin available to BDCs, which allowed them to buy dollar from the apex bank at N357/$1 and sell at N360, enabling them to earn a positive margin of N3 per dollar sold. Banks had long enjoyed the “unfair” trading position at N358/$ to sell at N360/$, while BDCs sell at N362/$, after buying at N360/$.
BDCs had earlier lamented that it is not only depriving them of customers, since they sell higher, but that the margin cannot offset their operational costs, making them to sack their workers and predisposing many of them to difficulties in obeying the rules and taking advantage of what comes around.It is certain that the latest development initiated by CBN has brought stability to the foreign exchange market and showed its proactive approach to ending multiple exchange rates tipped to permanently send currency speculators out of the market. The Association of Bureaux De Change Operators of Nigeria (ABCON) said it is commendable on the part of CBN’s policy direction and believes the rate unification will promotes efficiency, transparency, price discovery and will help phase-out the remaining part of multiple exchange rates regime. It was an idea, which time had come and a masterstroke needed to eliminate multiple exchange rates in the industry.