CBN may stop sales of forex to BDCs soon

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 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, nonbank 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.”

Gwadabe, who said that Nigeria was the only country in the world where BDCs get weekly allocation of forex from the central bank, added: “It is also a known fact that it is only in Nigeria that CBN collects N35 million compulsory deposits from BDCs just to give them a license.”

The CBN has since amassed in excess of N120 billion from the compulsory deposits.

“I think that policy of N35 million compulsory deposits imposed by the CBN is one of the major cause of this problem,” Gwadabe said, adding that the reason for selling forex to BDCs was to reduce the gap between the official and black market rate in the economy, something which the BDCs have helped the CBN to achieve.

If CBN went ahead to implement the decision, the naira fortune will further decline, he said.

Yesterday, the naira sold at $219 to the dollar.