Lunik Bureau De Change
A bureau de change is a business which, in competition with other similar businesses, makes its profit by buying foreign currency and then selling the same currency at a higher exchange rate. It may also charge commission or fee on the purchase or sale. In setting its exchange rates, the business would keep an eye on changing market conditions, as well as the rates quoted by competitors, and may be subject to government foreign exchange controls and other regulations. The exchange rates charged at bureaux are generally related to the spot prices available for large interbank transactions, and are adjusted to ensure a profit. The rate at which a bureau will buy currency differs from that at which it will sell it; for every currency it trades both will be on display, generally in the shop window. The bureau sells at a lower rate from that at which it buys.
A Bureau De Change (BDC) is defined by the Central Bank of Nigeria (CBN) manual as a retail foreign exchange dealer carrying on the business of Personal Travel Allowance (PTA), Business Travel Allowance (BTA), medical and school fees, and also to carrying on inward and outward transfer. So, a BDC is a licensed outfit, normally by the CBN. All over the world there are BDC operators and they play different roles. For instance, the primary role of BDCs globally, according to the Association of Bureau De Change Operators of Nigeria (ABCON), is to ensure forex availability to the critical retail sector of the forex market in terms of supply, to bridge the gap between the official and the parallel market exchange rate.
Benefits of BDC
- We have helped in eliminating the spike, volatility and uncertainty of exchange rate. Before people cannot plan. Manufacturers were crying, but now they are opting for the exchange rate above the inflation rate due to the stability been witnessed in the market.
- That has been one of the important roles BDCs play, in eliminating the spike, and also the gap between the exchange rates, which created opportunities for rent seeking. Speculations, which also used to be the other of the day in the forex market has also been eliminated. Also currency exportation, which is also an opportunity just because of the opportunities for rent seeking, is also not the order of the day.
- For an economy to grow, there must be some sectors doing the hard job. I can assure you that for this convergence that we have seen, the commendation should go to the BDCs, because it is our hard work that made it happen.