President, Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe has said that the ongoing rebound of the naira against dollar and other world currencies are indications that the Central Bank of Nigeria (CBN) policies and reforms in the forex market are working.
According to him, the naira, at both official and parallel markets, recorded a major comeback, exchanging officially at N1,485.95/$, one of its strongest positions in seven months. He further said that the naira equally rallied to N1,610 to dollar at the parallel market over the weekend.
Gwadabe called on the apex bank to review downwards the huge capital requirement for BDCs recapitalisation, saying meeting the capital base remains a big challenge for the majority of operators.
He also called on the CBN to grant ABCON self regulatory status to aid forward guidance of its members, and adopt the operators IT platforms to entrench a tech-driven industry and boost transparency in market operations.
Gwadabe hinged the naira rally to the newly implemented Foreign Exchange (FX) Code , investors confidence, investment in oil and gas output streamlining diaspora remittances aimed at enhancing market liquidity, transparency and guiding market participants in Nigeria’s foreign exchange sector, adding that meeting the needs of BDCs will further strengthen the local currency against the dollar.
The new CBN guidelines for the sector also requires all Tier-1 BDCs to raise N2 billion minimum capital to remain in business, while Tier-2 BDCs are to raise N500 million minimum capital. The Tier-1 BDCs will operate nationally, while the Tier-2 BDCs can only operate in one state within the Federation.
He urged all BDCs and authorised dealers to comply with the FX code guidelines in their operation while also adopting regulatory, management , Board , and activity report for their Risk exposures on their AML/CFT manual.
He also backed CBN’s position that all institutions engaged in the foreign exchange market must also provide the CBN with a detailed implementation plan outlining how they intend to achieve full compliance with the FX Code.
