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Naira Appreciates on Parallel Market as Travelex Commences Dollar Sales to BDCs

Relief appears to have come the way of the Naira, which had been under attack on the parallel market FX in the past few days as the currency strengthened to N473 to the dollar yesterday, from N475 to the dollar, it closed the previous day.

The appreciation of the naira followed the implementation of a new arrangement between the Centrak Bank of Nigeria (CBN) and Travelex, a global foreign exchange (forex) dealer.

Also, on the interbank FX market, the spot rate of the naira climbed to N307 to the dollar yesterday, compared to the N311 to the dollar it closed the previous day.

Clearly, the appreciation of the nation’s currency was buoyed by the announcement yesterday that Travelex would today start disbursing $15,000 to each of the 3,000 registered Bureaux De Change (BDC) operators.

President, Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, who disclosed this yesterday, said with each of the 3,000 BDCs getting $15,000 each, a total of $45 million will flow into the system.
He lauded the CBN for authorising Travelex to take responsibility of disbursing huge dollar inflows from the diaspora estimated at $21 billion annually to BDCs.

He said the development, which was an improvement from the initially approved $10,000 weekly, would deepen dollar liquidity in the system and strengthen the naira against the dollar.

Gwadabe, said the experience and integrity of Travelex would be key in getting the dollars down to BDCs.
He urged all ABCON members and BDC operators, as a matter of urgency, to visit the apex bank’s branches in their respective zones to update or validate their en-cashers and signatories mandate card for Travelex biometric data capturing.

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

He said remittances had direct positive and significant impact on consumption, investment, and demand in the country as it could be used to address short-run output shocks, and even long run growth. He said remittances tended to be stable and could increase during periods of economic downturns and natural disasters.
He commended the CBN for reaffirming the country’s commitment to building an enabling environment and level-playing field for international money transfer services to Nigeria.

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

Gwadabe also commended the CBN’s efforts to strengthen the BDCs to meet the forex demand at the retail end of the market, so that they would continue to enhance employment generation in the country.
The ABCON boss was optimistic despite the challenges facing the economy, the CBN and BDCs would continue to work together and find sustainable solutions that could help the country wriggle out of the ongoing forex crisis and achieve full economic recovery.

He pledged that ABCON under his leadership would continue to ensure that purchased funds are sold to end users and on eligible transactions only, while weekly returns on purchases from the banks will be rendered to Trade and Exchange Department of the CBN. He further promised to ensure strict compliance to the provisions of the anti-money laundering laws and observance of appropriate KYC principles in the handling of forex transactions.

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