Having received $20,000 allocation in two dollar auctions last week, bureau de change operators in Nigeria are calling on the Central Bank of Nigeria (CBN) to increase their profit margin as well as the volume of dollars they are allocated on a weekly basis.
The CBN last week resumed dollar sales to BDC operators, selling to them at N360 to the dollar while expecting them to sell to end users at N362 per dollar. The apex bank had sold $10,000 each to the BDC operators on Tuesday and also held a special intervention on Friday where it again sold $10,000 each to the BDCs.
However, the BDCs say the profit margin of N2 which was given by the CBN is small and needs to the reviewed upward. Rising from a general meeting yesterday, the BDC operators said they want the apex bank to increase their margin to N10 per dollar and also increase the volume of dollar allocations to to $50,000 per week.
President of the Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe who assured that the members of the association will work towards ensuring stability in the foreign exchange market said, “We have told the regulators that it is small, in other climes there are margins that are up to 10 per cent. The margin of N2 we feel is still small so let the CBN review that margin to at least N10 per dollar.”
He noted that the BDCs have resolved to challenge the spike and volatility in the foreign exchange market, saying “we will cooperate with the CBN as we always do to see that we narrow the gap between the parallel market and the official market.
“There are a lot of pressure even from the International Monetary Fund (IMF) which says our naira is overvalued there are pressures from speculators, there are pressures from black market operators, there are pressures from people that carry hot money, all these is happening in the market and it is really driving the rate, we are looking at a very acceptable margin between the official and parallel market rate, say a maximum of 5 per cent.”