The Association of Bureau de Change Operators of Nigeria, ABCON, says that the creation of multiple exchange rates by the Central Bank of Nigeria (CBN) was inimical to the nation’s economy.
Alhaji Aminu Gwadabe, ABCON’s President, made the remarks in an interview with the News Agency of Nigeria (NAN) on Saturday in Lagos.
Gwadabe said that such multiplicity would likely breed ‘rent seeking, poor compliance and round tripping’.
“The concerns of multiple exchange rates creates gaps, panic, and threat to the survival of the sub-sector.
“The sustainability of the bureau de change sub-sector largely depends on a single exchange rate regime in the economy which would discourage incidences of speculation,” he said.
He, however, commended the Central Bank for outlining sanctions on International Money Transfer Operators who remit diaspora remittances in naira.
“The measures would checkmate the diversions of diaspora proceeds’ remittances into the unofficial market,” the ABCON president observed.
“The measures would enable the CBN increase liquidity into the official window of the forex market, create transparency, market equilibrium and reduce illegal diversions.
“Volatility in the unofficial market would also be increased in the short run and stabilised in the medium term,” he said.
He said that the COVID 19 pandemic had affected the bureau de change sub-sector by disrupting supply sources to the operators and changing customers’ behaviour towards more contact-less payment channels.
“The good news is that it would enhance the creation of new products for global competitiveness,” the ABCON president said.
The News Agency of Nigeria (NAN) recalls that multiple exchange rate regimes led to the emergence of different exchange rates in the three major segments of the foreign exchange market.
The three major segments include the official market, investors and exporters window and the parallel market.