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From Adanna Nnamani, Abuja
The Association of Bureaux de Change Operators of Nigeria (ABCON) has called on the Central Bank of Nigeria (CBN) to order non-oil exporters to retain foreign exchange in their domiciliary accounts for a period of 48 hours.
In a statement issued on Thursday, president of ABCON, Aminu Gwadabe, spoke in support to the recent directive to stop the use of the non-oil export domiciliary accounts deposits for naira loans.
The CBN on April 8, asked all banks to suspend the use of foreign currency-denominated collaterals for naira loans.
As part of the bank’s risk assessment, the apex bank said that all current loans with foreign currency collateral would be reduced to 90 days or subject to a 150 percent capital adequacy ratio computation.
Gwadabe, addressing the CBN’s efforts, stated that the directive will increase the amount of dollar liquidity available in the market.
He said: “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 the 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 Nigerian Autonomous Foreign Exchange Market (NAFEM) and Nafex window.”
Gwadabe also urged the CBN to seek legislative backing for its policies and circulars on BDC reforms in order to improve investors’ confidence.
“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,” he stated.
The president of the Association also stated that as a self-regulatory entity, its members have decided to consistently involve all stakeholders and participants in the retail market to enhance, liberalize, democratize, and centralize the retail segments for better price discovery, market efficiency, transparency, building reserves, and maintaining a healthy balance of payments.
“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,” he said.
