The Central Bank of Nigeria has withdrawn the licenses of about 2,698 Bureau de Change (BDC) operators in Nigeria. It is a move that has graced headlines and kept the regulatory body in the spotlight as it strives to establish stability in the parallel market. In 2021, the CBN listed about 5,689 BDC licensed operations, which has drastically reduced following its recent publication. Many Nigerians wonder why the apex bank has taken its recent step and its relevance to the current economic challenges.
First, Bureau de Change is a business that primarily profits from buying foreign exchange and selling the same currency at a higher exchange rate. In Nigeria, the BDC industry rose from the need for retail foreign exchange dealers who would guarantee the availability of FX in Nigeria. Over the BDCs have risen to bridge the gap between the official and parallel markets. BDC operators are vital in influencing the CBN's quest for stability in exchange rates, as a stable exchange rate is essential for sustainable development for developing economies like Nigeria.
The move by the CBN will further reaffirm its commitment to achieving stability and unification across the forex market in the country. Revoking the licenses would also tackle the cases of illegal BDC operators who swindle innocent Nigerians of their resources. The CBN is also keen on ensuring that all BDC operators strictly adhere to regulatory rules in dealing with individuals and other businesses.
The central bank will hope its move and policies will set up the right platforms for the Naria to continue its appreciation against the Dollar as yesterday's exchange rate between the Naira and the US dollar closed at N768.16 per Dollar at the official Investor and Exporters window, which represented a 3.22% appreciation against the US dollar.