The recent directive by the CBN to commercial banks to sell dollars for school fees and medicals would lead to the emergence of new currency traders, Alhaji Aminu Gwadabe, has said.
Gwadabe, President, the Association of Bureau De Change Operators of Nigeria (ABCON), in an interview on Tuesday in Lagos south west Nigeria said that the development would worsen the crises of multiplicity of rates.
“The rate disparity between banks and the BDCs will definitely breed another FX traders between the banks and the end users.
“We will see the return of what is normally called the proliferation of bank’s treasurers/account officers turning to BDC operators overnight,’’ Gwadabe said.
According to him, the directive would address liquidity challenges in the forex market, adding that its objectives will not meet the expectations of the apex bank in the short- term, due to protracted liquidity challenges.
“Due to long time perverse lack of liquidity and the volume of FX done by the mega banks, the objectives will not meet the expectations of the CBN in the short term.
“The directive has added another rate to the lingering crises of the multiplicity of rates in the market and is highly skewed in favour of the banks,’’ Gwadabe said.
The ABCON president said that the directive did not provide a level playing ground for the banks and the BDCs on rates, the volume on the same product and the market, saying that it was a great source of worry to ABCON.
“The BDCs are not meant to be in competition with the banks. We are supposed to provide complementary roles.
“It is only in Nigeria that you want to buy 2000 dollars and you are meant to go to the banks and queue for two months, without allocations, which is in conflicts with the BDCs operations on cash and spot.
“The implication is that the BDCs will buy International Money Transfer Services Operators (IMTSO) proceeds at 381 per dollar and sell at N399 to a dollar, while the banks are to buy at N315 per dollar and sell at N375 per dollar for them to make their 20 per cent above the interbank rate.
“This is our concern as an association and the entire BDC operators in the country,’’ Gwadabe said.
The financial expert, therefore, said that the CBN should direct the banks to sell to BDCs certain percentage of their interbank sources and the liquidity would definitely be in the market.