Forex Policy Fear of EFCC, CBN sanction forces BDCs to lower rates

The DSS raided offices of some BDCs in Lagos and arrested operators selling above the stipulated exchange rate.

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A trader changes dollars with naira at a currency exchange store in Lagos, Nigeria, February 12, 2015. REUTERS/Joe Penney/File Photo play A trader changes dollars with naira at a currency exchange store in Lagos, Nigeria, February 12, 2015. REUTERS/Joe Penney/File Photo
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Bureau de Change operators have been forced to fix sales of foreign currencies such as dollar, pounds and euros for fear of sanctions by anti-graft agencies and the Central Bank of Nigeria.

For the past three days, naira has been changing for N400 to a dollar at the parallel market.

Checks by the News Agency of Nigeria (NAN) on Thursday in Abuja proved fear to be the reason.

A Licensed BDC operator in Abuja, Alhaji Yusuf Rabiu, said the recent raid of bureau de change establishments by the Economic and Financial Crime Commission forced the operators reach such an agreement.

Also, it was agreed that Pound sterling would exchange for N540 and Euros for N500.

Usually, the rate of Forex at the BDC segment is based on demand and supply. When demand is higher than supply, each operator uses his discretion to hike the price.

To regulate the segment, CBN recently issued a policy that allowed each BDC to buy dollars from Travelex at N381 per dollar and sell to end users at a maximum of N400 per dollar.

On Wednesday, the Department of State Services (DSS) raided the offices of some BDC in Lagos and arrested operators selling above the stipulated exchange rate.

The DSS operatives posed as end-users who came to purchase dollars from the BDCs. After surveying the market for exchange rate offerings, they arrested some BDC operators who sold above the CBN agreed rates.

“On Monday, EFCC called so many licensed BDC operators. The issue is that they feel we are unnecessarily hiking the rates. But it’s not our fault.

“Right now, their focus is on our business; they have been calling us one by one and we don’t want problem. That is why we have agreed to have a fixed rate for now,” he said,

Adding that “After the raid in Lagos, we the Abuja operators met and agreed on a fixed rate so that such will not happen to our members."

Another operator, who preferred anonymity, said the market was slow as people who had dollars were not ready to sell at the existing rate.

ALSO READ: CBN blocks all transfers into Nigeria except Western Union, MoneyGram, Ria

He said personally, he had temporarily closed shop to potential customers until he studied the market for the next couple of weeks to determine if the new policy would come to stay.

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