As part of the efforts to reduce the pressure on the Nation’s foreign reserves, the Central Bank of Nigeria (CBN) has announced that it shall discontinue the sale of forex to Bureau de Change enterprises.
The reserves closed last year at $28.364 billion, then dropped last weekend to $28.193 billion, meaning a depreciation by $170 million in the first trading week of this year.
Economists will hardly find this encouraging. It is on this premise that the CBN has made the move.
Upon the announcement of this new policy by the CBN, it was reported that the national currency, Naira, completely reversed its Christmas gains, hitting a new low value of N283/USD1 in BDCs and the parallel markets.
The CBN Governor, Mr. Godwin Emefiele, made known yesterday that BDCs are now to source forex from the autonomous market.
In his words, he states that “The bank (CBN) would henceforth discontinue its sales of foreign exchange to BDCs. Operators in this segment of the market would now need to source their foreign exchange from autonomous source. They must, however, note that the CBN would deploy more resources to monitoring these sources to ensure that no operator is in violation of our anti-money laundering laws.”
“Despite the fact that Nigeria is the only country in the world where the central bank sells dollars directly to BDCs, operators in this segment have not reciprocated the bank’s gesture to help maintain stability in the market. Whereas the bank has continued to sell Dollars at about N197 per dollar to these operators, they have in turned become greedy in their sales to ordinary Nigerians, with selling rates as high as N250 per dollar.”
About the challenge this might pose to the stakeholders, BDCs operators who cannot cope with the new regulation had the option of turning in their licences to collect their N35 million cautionary deposits with the CBN.