Forex: ABCON lauds CBN directive to commercial banks

Forex: ABCON lauds CBN directive to commercial banks

The Association of Bureau De Change Operators of Nigeria (ABCON) on Tuesday lauded the Central Bank of Nigeria’s (CBN) directive to Deposit Money Banks (DMBs) to sell forex to BDCs.

Alhaji Aminu Gwadabe, President of the association, told newsmen in Lagos that the directive would enhance liquidity flow within the economy.

Gwadabe, however, lamented that five days after the directive, no bank had sold forex to any BDC operator.

CBN on July 22 instructed Deposit Money Banks (DMBs) to commence the sale of forex to BDCs.

The CBN explained that the sale of foreign currency proceeds from international money transfer agents to BDCs would lead to greater stability in the foreign exchange market.

The apex bank added that the decision was also made to encourage critical stakeholders in the foreign exchange market to participate fully.

The ABCON chief said that its members visited about five banks in Lagos on Monday to see the level of compliance with the CBN directive.

He said that all the banks visited told the association that they could not immediately respond to the directive because of ill liquidity.

“The banks told the association they cannot immediately give what they do not have.

“They told the association that they could not sell because international money transfer agents do not keep a float for DMBs from which they would sell to BDCs,’’ Gwadabe said.

Gwadabe added that the decision of the CBN to sell Forex to BDCs was laudable because it would contribute positively to the liquidity of Forex in circulation.

He reiterated that ABCON members had automated their operations to meet the requirement of inter-phasing with international money transfer agents.

Mr Harrison Owoh, a BDC operator, expressed optimism that the DMBs might comply with the directive in the coming weeks.

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