Forex – CBN bars banks from selling to BDCs, hotels

Forex trading01 November 2014, Abuja – The Central Bank of Nigeria has barred Authorised Dealers (Commercial banks) from selling interventions funds in the interbank market to Authorised Buyers (Bureaux de Change and hotels).

In a circular -TED/FEM/FPRB/GEN/01/020, dated October 28, 2014, issued by the apex bank, it directed that funds purchased through the CBN interventions should be utilized within two (2) working days of delivery, at a rate not more than 10 kobo above the purchase rate.

CBN said the move is to further sanitized the operations of the foreign exchange market in Nigeria.

The CBN circular also directed that unutilized funds within 2 days of delivery should be returned to the Bank at the original purchase rates.

The essence of the directives was to ensure compliance with the Net Open Trading Position limit and to ensure further control of the interbank market operations. It stated that any observed flouting of these directives will be appropriately sanctioned.

In recent times, the value of Naira is reducing due to the fall in the price of crude oil in the international market and high demand of dollars in the local markets.

The CBN reduced the amount of weekly purchase of Dollar by the BDCs from initial $50,000 to $15,000 and increased the mandatory deposit from N10 million to N35 million for each BDC. Recently, the CBN governor, Godwin Emefiele said there is possibility of introducing some tight measures in order to mitigate the possible shocks due to the fall in crude oil price.
Hamisu Muhammad – Daily Trust

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