Unified Exchange Rate’ll Attract $25bn Diaspora Remittances – ABCON
The Federal Government’s move to unify multiple exchange rates in the country will attract over $25bn diaspora remittances according to currency exchange operators.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, had recently hinted of the Federal Government’s plans to unify the multiple exchange rates to generate more local currency from its dollar inflows and further achieve naira stability.
As the market awaits the Central Bank of Nigeria to totally lift the partial ban on foreign exchange sales, the naira exchanged for 461 to the dollar at the parallel market, and at 386 at the investors’ and exporters’ window on Monday.
The President, Association of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwadabe, while outlining the benefits of the unification, said, “It will attract over $25bn diaspora remittances, lead to increase liquidity and discourage speculation and hoarding.
“It will ease regulatory supervision, ensure transparency and effective price discoveries, and deepen market perfections.”
He however said to achieve these, the BDC operators must adapt to the new normal way of doing things.
According to him, the unification of exchange rates is a mechanism for a shift in the static exchange rate regime to a flexible exchange rate regime, and remains the only solution to forex market rate stability.
He said it would usher in competition, better resource allocation and transparency in the market.
Gwadebe said, “The CBN has tried it before in 2017 with the introduction of the I&E window to enhance liquidity in the market.
“The BDCs remained the only monetary instrument of the CBN to achieve unification of exchange rate as they service the critical retail sector of the foreign exchange market.”
According to him, the step to take in achieving that is to make the BDCs the agents of international monetary transfer service operators.
“ABCON has, through their consultants, embarked on designing and development of a robust automation application that will serve the requirements for BDCs agencies of IMTSO,” Gwadebe said.