CBN may stop sales of forex to BDCs

Central Bank of Nigeria, CBN.

Central Bank of Nigeria, CBN.

01 September 2015, Abuja – The Central Bank of Nigeria, CBN, may soon stop its weekly sales of foreign exchange to the Bureau De Change operators in Nigeria.

Daily Trust findings show that the CBN would take the action to stop the growing pressure on the naira.

Experts have predicted if the pressure on the naira continued with the dwindling oil fortunes of Nigeria, the CBN may be forced to further devalue the naira.

Sources within the CBN told our correspondent under condition of anonymity that the CBN is “strongly considering banning its weekly sales to the BDCs between now and first quarter of next year if the naira condition does not improve,” adding: “The evidence supporting the action has been collected and I wonder why the CBN is still delaying the implementation.”

He said the decision was partly informed by the fact that Nigeria was among the few countries in the world where BDCs still accessed forex from the official window.

“While I cannot say exactly when the policy would come to effect, I can confirm it’s a position the CBN would adopt soon,” another source familiar with the matter said, adding that the policy will become effective soon.

Checks from South Africa, Ghana and Egypt showed that the BDC operators in those countries used to source their foreign exchange from the banks, non-bank foreign exchange companies, tourists and other walk-in customers.

The CBN currently sells $30,000 per week to the about 2, 618 registered BDCs in Nigeria who applied for the forex.

The CBN allows the BDCs to sell with 3.5 profit percent margin.

Alhaji Aminu M. Gwadabe, the national president, Association of Bureau De Change Operators of Nigeria (ABCON), said: “The sources of dollars to BDCs have been reduced to a large extent. We can no longer access the banks autonomous funds. So we will be left with only walk-in customers if the CBN eventually closes its window to BDCs.”
*Chris Agabi – Daily Trust

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