The Nigerian naira continued its alarming downward spiral in the parallel market, where it exchanged at a rate of 980 naira to the US dollar today. This represents a significant drop compared to the previous week when the exchange rate stood at 950 naira per dollar. Experts are attributing this sharp decline to a severe scarcity of foreign currency in the country.
Bureau de Change (BDC) operators, who are on the front lines of the currency exchange market, expressed their concerns over the situation. Idris Musa, a BDC operator, lamented, “We bought and sold the naira today at 965 naira to the dollar and 980 naira to the dollar, respectively. The dollar is not even readily available in the market.” Another BDC operator, Yusuf Kareem, echoed these concerns, saying, “The dollar was being sold for 980 naira today. We are uncertain whether this trend will persist or if there’s a possibility of it reversing.”
Interestingly, the Foreign Exchange (Forex) Market Development Quotations (FMDQ) showed a slight appreciation of the naira at the Investor & Exporter forex window. It closed at 770.71 naira to the dollar on Wednesday, up from 776.76 naira to the dollar on the previous day. This suggests that the official market is not experiencing the same level of volatility as the parallel market.
The Association of Bureaux De Change Operators of Nigeria (ABCON) has recently urged the Central Bank of Nigeria (CBN) to grant Bureaux De Change operators digital autonomy in an effort to achieve exchange rate convergence. Dr. Aminu Gwadabe, the President of ABCON, issued a statement calling for a no-objection approval from the CBN to enable BDCs to fully transition to digital operations in all their correspondences.
Gwadabe emphasized that BDCs source foreign currencies from various channels, including private sources and the CBN window, which are essential for purposes such as funding Business Travel Allowance, Personal Travel Allowance, School Fees Payments abroad, Medical expenses, mortgage payments, personal home remittances, and subscriptions.
To ensure transparency and compliance with regulations, ABCON has trained compliance officers tasked with monitoring monthly financial reports and tracking illicit capital flows. Gwadabe also pointed out that BDCs are diligently complying with reporting requirements for suspicious transactions, as directed by the Nigerian Financial Intelligence Unit (NFIU), CBN, and the Economic and Financial Crimes Commission (EFCC