Naira recovery is likely, as Travelex begins weekly dollars sale to BDCs

The naira is expected to make a surprise recovery from today as Travelex, a global foreign exchange (forex) dealer, begins the sale of $15,000 weekly to each of the 3,000 Bureaux De Change (BDC) operators.

Association of Bureau De Change Operators of Nigeria (ABCON) President Aminu Gwadabe, who broke the news yesterday, said $45 million will flow into the financial system with each of the BDCs getting $15,000. The exercise, he said, would strengthen the naira in both the official and parallel markets.

The naira was yesterday exchanging at N473 to dollar in the parallel market and N310 to dollar in the official market. The local currency has lost over 70 per cent of its value in both markets year-to-date due to plunge in crude oil prices which cut the country's dollar earnings.

Gwadabe explained that the funds to be disbursed to BDCs today, were from the Diaspora remittances estimated at $21 billion annually. He said the CBN took the right steps by authorising Travelex to take responsibility of disbursing the Diaspora to licensed BDCs. He said the $15,000 weekly dollar sales, was an improvement from the initially approved $10,000 weekly, would deepen dollar liquidity in the system and strengthen the naira against the dollar.

The ABCON boss said the experience and integrity of Travelex will be key in getting the dollars down to BDCs.

He urged all BDC operators, as a matter of urgency, to visit CBN branches in their respective zones to validate their en-cashers and signatory mandate cards for Travelex biometric data capturing excercise.

Gwadabe said the biometric data capturing project would enable the BDCs access the International Money Transfer Operators (IMTOs)/Travelex dollars window.

He said remittances have direct positive and significant impact on consumption, investment, and demand in the country as it can be used to address short-run output shocks, and even long run growth. He said that remittances tend to be stable and to increase during periods of economic downturns and natural disasters.

He said the CBN is reaffirming the country's commitment to building an enabling environment and level-playing field for international money transfer services to Nigeria.

He said that by increasing the number of IMTOs from three to 14, the CBN under its Governor, Godwin Emefiele, is setting the economy on the path of development in the medium- to long-term and also, restore integrity in the international money transfer business.

Gwadabe said the ongoing dollar sales to BDCs would strengthen the operators to meet the forex demand at the retail end of the market so that they can continue to enhance employment generation in the country.

The ABCON boss believes that despite the challenges facing the economy, the CBN and BDCs would continue to work together and find sustainable solutions that can help the country wriggle out of the ongoing forex crisis and achieve full economic recovery.

He pledged that ABCON would continue to ensure that purchased funds were sold to end users and for eligible transactions and also render returns promptly. He further promised to ensure strict compliance to the provisions of the anti-money laundering laws observance of appropriate Know Your Customer principles in the handling of forex transactions.