The Bureau De Change (BDC) operators have lamented that they are close to going out of operations as most of its members are struggling to stay afloat and meet up with overhead expenses.

These licensed currency traders have attributed this mainly to the suspension of dollar allocation by the Central Bank of Nigeria (CBN) to the BDCs, as they struggle to have access to foreign exchange from the official window.

The operators lamented that with the huge drop in income level, paying staff salaries, office rent, licenses and other compliance expenses has become a major challenge.

This is further compounded by the uncertainty in the retail sub-sector of the forex market, with many of the BDC operators still battling to meet up with the recapitalization and license processes.

The BDC operators had always advocated for increased participation and involvement in the foreign exchange market to help sustain the success of the various policies being implemented by the CBN and help provide more liquidity.

This push by the BDCs followed the June 2023 unification of all segments of Nigeria’s foreign exchange market, consolidating all windows into one. This action by the apex bank was part of a series of immediate changes aimed at improving liquidity and stability in the Nigerian Foreign Exchange (FX) Market.

The currency traders had advised the CBN to always leverage the BDCs and allow them access to banks’ autonomous window and agencies of international money transfer operators.

The CBN had in July 2021 stopped the sale of forex to BDC operators across the country, accusing them of becoming conduit for illegal financial flows, working with corrupt people to conduct money laundering in Nigeria.

In February 2024, the apex bank announced the resumption of forex sales to the BDCs following the revocation of operational licenses of over 4,173 of these licensed currency traders over their failure to comply with some regulatory guidelines. This was to help enhance liquidity in the retail segment of the forex market.

However, the CBN has since stopped the sales of forex to the licensed currency traders with little or no intervention till date. The BDC operators, who said that the CBN could not sustain the exercise, however, noted that they are `engaged in positive discussion with the apex bank for the return of their active participation in the BDCs in the retail end of the forex market.

The forex traders had over 2 years ago called on the CBN to allow them to provide liquidity in the retail end of the foreign exchange market, stating that the apex bank needs them for the success of the forex policies.

They advised the CBN to immediately leverage the BDCs and allow them access to banks’ autonomous window and agency of international money transfer operators.

They also urged the CBN to reinstate its 2015 policy guidelines, which allow the BDCs to effectively provide liquidity in the retail end of the market through the forex windows.

The 2015 policy guidelines allow the BDC operators to access foreign exchange from the autonomous window of the commercial banks, as well as act as agents for diaspora remittances.

Source: Nairametrics