BDCs Back CBN’s Directive on Use of Non-export Domiciliary Accounts
The Association of Bureaux de Change Operators of Nigeria (ABCON) has lent its support to the recent directive of the Central Bank of Nigeria (CBN) to stop the use of the non-oil export domiciliary accounts deposits for Naira loans.
Dr. Aminu Gwadabe, President of ABCON said in a statement that the stoppage would not only add to dollar liquidity in the market but also help in the accretion of our buffers.
“We are bewildered that some companies and manufacturers with huge billions of dollars balances in their non-oil export Dom account source their FX needs in the official window and use same for Naira loans. We therefore advise for the review of the guidelines on holding currencies on non-oil export accounts to a maximum of 48 hours, to borrow from the South African policy on the operations of non-oil exports Dom account proceeds. The CBN should also not make applicants of huge billions of dollars holding on their non-export oil proceeds Dom accounts eligible for FX request at both the NAFEM and Nafex window. In the same vein we urge the CBN to upgrade its policies and circulars to legislation regarding the impending BDCS new reforms to give comfort and guarantees to would be investors in the transformation of the BDC industry’s sub sector and allowing only the existing stakeholders the grants father’s right for merger and acquisition to meet the expected reviewed financial requirements as suggested by Abcon. We also want to pledge our continuing support to the CBN’s proactive and effective policies to address our volatility headwinds,” Gwadabe said.
The ABCON chief said that as a self-regulatory body, ABCON and its members have resolved to continue engaging all stakeholders and players in the retail-end market to deepen, liberalise, democratise and centralise the retail-end segments of the market for price discovery, market efficiency, transparency, accretion of buffers and healthy balance of payments.
“We express our profound gratitude to the management of the CBN for its reconsideration and reinstatement of our sub-sector as third leg of the market to counter hoarding and speculation with faster results than expected. The BDCs though unfortunately perceived sometimes as crude but effective will always remain the potent transmission mechanism tool of achieving the Apex bank’s mandate of price stability and liquidity in the market. We therefore urge the CBN to continue to drive and expand its thought mechanism to maintain the feat so far achieved in more than 15 years; as we have not only achieved the convergence of both rates, but market calmness and confidence of the public and foreign investors. We also call for the separation of the ownership and operational structure of FMDQ,” Gwadabe added.
