FX volatility: BDCs’ reintroduction triggers divergent expectations

The naira, through Wednesday, to Thursday morning, dropped to 950/$ at the parallel market.

This drop matches the record it set in the weeks that followed federal government’s decision to float the currency.

As at 9:44 an on Thursday, Aboki Forex, a platform that monitors real-time exchange rate at the parallel market listed the purchasing price at N940/$ and the selling price at N950/$.

Bureau de Change operators spoken to also disclosed that the naira which had earlier closed at 930/$ at the close of operations on Tuesday, was bought and sold at 935/$ and 950/$ on Wednesday.

A BDC operator, Yusuf Kareem, who spoke to The Punch said, “We commenced trading at 930/$ in the morning and it closed at 950/$ in the evening. The naira has been scarce; we don’t know what is happening.”

The Association of Bureaux De Change Operators of Nigeria, recently, urged the Central Bank of Nigeria to grant Bureaux De Change operators digital autonomy to achieve exchange rate convergence.

In a statement, the President, ABCON Dr. Aminu Gwadabe, called on the apex bank to grant a no objection approval for the BDCs to fully go digital on all their operational correspondences.

He said the move would promote rate convergence, curb volatility in the market and promote economic growth.

ABCON had in the past, led its members to achieve rate convergence in 2006, 2009, 2018 to 2020 before the outbreak of COVID-19 in 2020, he said.

Granting digital autonomy to the operators, he noted, would lead to a true market rate discovery, enhance the achievement of the Federal Government harmonised foreign exchange rate policies, and promote effective monitoring of BDCs’ transactions for statutory and regulatory requirement.

Meanwhile, at the Investor & Exporter forex window, the naira closed at 758.12/$ on Wednesday, from 742.10 on Tuesday, according to figures obtained from the FMDQ, the official trading platform.


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