Foreign exchange: traders battle for profit

The convergence of rates between licenced Bureau De Change Operators and parallel market traders is gradually leading to a profit battle, reports say.

The aggressive interventions in the foreign exchange (Forex) market attained a crescendo on Tuesday in Lagos as the Naira traded between N360 and N363 at both the BDC window and the parallel market.

Mr Abubakar Audu, a trader at the unofficial market  said the collapse of rates was skewed in favour of the parallel market, as there were no conditions for the sale of Forex unlike the BDCs.

Audu said that the parallel market had witnessed increased patronage as Forex buyers now have easier access to it without prior verification of travel documents as operated by the BDCs.

Mr Harrison Owoh, a BDC operator explained that the market was a reflection of the forces of demand and supply, adding that the decline in profit at the BDC sector may lead to staff rationalisation if not addressed.

Owoh called on its members to remain calm and operate within the ambits of the law.
Series of interventions by the Central Bank of Nigeria (CBN) had impacted the market positively, leading to relative stability in the exchange rate and the achievement of rates convergence.

However, if rates adjustment is not done at the BDC sector, the fate of about 15,000 employees of the BDCs are at stake.

It behooves on the CBN as the regulator of the financial market to use its discretion in this matter as the impending job losses would be one too many for the economy.