Tuesday, 23 February 2016

Naira appreciates to N345/$ as BDCs reject devaluation

The Naira Tuesday appreciated further to N345 per dollar in the parallel market. Meanwhile bureaux de change BDC) operators have voiced their support for the federal government’s position against further devaluation of the naira kicked against further devaluation of the naira.
The parallel market exchange rate, which had been on the downward trend since last week, fell further to N345 per dollar at the close of business yesterday from N375 on Monday. BDC operators said attributed the continued appreciation to increased supply and sharp decline in demand for foreign exchange. “People are coming to the market to sell but there is no demand”, said Taiwo Ebenezer, South West Zonal Chairman, and Association of Bureaux De Change Operators of Nigeria (ABCON). Speaking at a press conference Tuesday, ABCON President, Alhaji Aminu Gwadabe, dissociated BDC from the rapid depreciation of the naira from N265 to N400 in the parallel market saying such developments is not good for the business of BDC. He said, “Depreciation of the naira affects the working capital of BDCs and by extension their turnover. BDCs are able to do more business when the exchange rate is stable and relatively close to  the official exchange rate. Hence, BDCs cannot promote what is injurious to their business. Secondly, BDCs are basically intermediaries. They buy dollars from the public and sell to the public. Our incomes come from the margin between the selling rate and buying rate. To this end BDCs are more interested in turnover than in the exchange rate. We make money from the rate at which we can use our working capital to buy and sell dollars. We make money from the rate at which we can use our working capital to buy and sell dollar.