Bureau De Change (BDC) operators in Nigeria are finding it increasingly difficult to buy foreign exchange from commercial banks, as the parallel market rate has dropped below the official rates offered by banks, according to the Association of Bureau De Change Operators of Nigeria (ABCON).
ABCON President, Aminu Gwadabe, highlighted this challenge while explaining the recent recovery of the naira. He noted that on Tuesday, banks offered dollars to BDCs at a weighted average rate of N1,505 per dollar, while the parallel market rate stood at N1,503 per dollar.
This rare situation, where the parallel market rate is cheaper than the official rate, effectively prevents BDCs from buying forex from banks. Typically, BDCs purchase dollars from banks and resell at a slight premium to retail buyers, but with the lower rates in the parallel market, this business model is being disrupted.
“For instance, yesterday, while the banks are offering a weighted average of N1505/$, the parallel market levels were at N1503/$ which even makes the BDCs constrained to buy from the banks,” Gwadabe explained.
The development reflects the impact of the Central Bank of Nigeria’s (CBN) recent foreign exchange reforms, improved liquidity in the official market, and growing confidence in the naira. The CBN had resumed selling forex directly to BDCs as part of efforts to stabilise the retail forex segment, but this latest price distortion limits the effectiveness of that policy.
Despite the difficulties, ABCON remains optimistic that the naira’s recovery will continue as speculative demand eases and inflows improve. Gwadabe called for sustained policy reforms, greater transparency in the forex market, and continuous engagement between the CBN and BDC operators to ensure stability and inclusion in the foreign exchange system.
For now, BDCs are hoping that the price gap between the official and parallel markets will correct itself soon, allowing them to play their critical role in the retail forex supply chain.
