BDC operators declare war against currency speculators

A currency dealer counts bundles of naira banknotes for exchange on the ‘black market’ in Lagos, Nigeria. Photographer: Tom Saater/Bloomberg

By Geoff Iyatse

 •As dollar approaches N490/$ at black market

The Central Bank of Nigeria (CBN)-licensed Bureau De Change (BDC) operators have declared

operational war against foreign exchange speculators and black market dealers whose activities they accused of distorting the foreign exchange (FX) market.

This came as the dollar broke the N480/$ resistance level, inching towards N490/$. At the weekend, the dollar was selling at about N485/$ in Lagos and Abuja.

The Investors’ and Exporters’ (I & E) window closed the last trading day of the previous week at N410/$ as against N 409.13/$ it opened with, gaining an appreciation of 0.24 per cent. The N410/$ becomes the upper resistance band since the beginning of the year.

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Speaking during a virtual meeting with members of the Association of Bureaux De Change Operators of Nigeria (ABCON) across the country, the association’s President, Dr. Aminu Gwadabe, said the BDCs will not allow FX speculators and street hawkers to take over their business through anti-market practices.

The ABCON boss who spoke at the meeting held simultaneously in Lagos, Abuja, Kano, Onitsha and Benin and attended by over 5,000 operators, said licensed BDCs will continue to defend the naira through regulatory compliance and constantly supporting the BN to achieve a stable exchange rate and attract forex into the economy.

He said the sensitisation would upscale BDCs’ compliance with the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).

Gwadabe said: “Now is the time to support the CBN to achieve a stable exchange rate. Do not allow forex speculators, street hawkers to take over our business. Constantly comply with CBN’s regulations on the rendition of returns and corporate governance practices because besides stabilising the naira, the CBN examiners may visit your offices. And if they do, defaulting members will be sanctioned.”

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According to him, members can be spot-checked by the CBN examiners anytime, a reason they put in place necessary measures to align with the regulatory policies.

“All BDC operators should appoint compliance officers and data protection officers as directed by the CBN, which is also in-line with global best practices. Also, avoid sending your returns late and stop selling dollar above CBN-approved rate,” he advised.

Gwadabe said by following set rules, the operators would set a good example and make forex buyers lose confidence in black market dealers while embracing BDC operators.

According to him, ABCON members needs a full understanding of how to raise and submit both the Suspicious Transaction Reports (STRs) and Currency Transaction Reports (CTRs) to the regulators; understand the obligation of registering and filling reports on the anti-money laundering portal as well as know how to properly document forex sales. He also charged them to file a weekly report to the Nigerian Financial Intelligence Unit, the CBN and the Economic and Financial Crimes Commission (EFCC) while complying with know your customers (KYC) rules