Market News

The Naira is set to further depreciate in value as the Central Bank of Nigeria (CBN) yesterday stopped sale of foreign exchange to Bureau de Change operators (BDCs)  across the country.

The apex bank yesterday announced the immediate discontinuation of the sale of foreign exchange to BDC operators, saying they have become a conduit for illegal financial flows working with corrupt people to conduct money laundering in Nigeria.

The CBN also suspended the issuance of new licences to money changers across the country with immediate effect.

Governor Godwin Emefiele, during a media briefing at the end of the monetary policy committee (MPC) meeting yesterday, said that henceforth the apex bank would sell forex to deserving Nigerians through the commercial banks.

This confirms LEADERSHIP’s earlier story on the need to harmonise the multiple exchange rates in operation, a situation that worried multilaterals and foreign portfolio investors (FPIs).

LEADERSHIP had exclusively reported that there were more than five different rates in the nation’s foreign exchange market, thus giving considerable advantage to middlemen, with an average difference of 50/$, who keep smiling to the bank and providing opportunities for arbitrage and round tripping.

The CBN has sold a minimum of $5.3 billion to BDC operators in the 11 months between September 2020 (when the CBN resumed sale of forex to BDC operators post-COVID-19) and July 2021.

The CBN had since last September been supplying a minimum of $120 million to the over 6000 licenced BDCs in the country at $20,000 to each operator every week.

Emefiele said: “The BDCs were regulated to sell a maximum of $5,000 per day,  but CBN observed that they have since been flouting that regulation and selling millions of dollars per day.

“The CBN also observed that the BDCs aid illicit financial flows and other financial crimes.  The bank has thus decided to discontinue the sale of forex to the BDCs with immediate effect.

“We shall, henceforth, channel all forex allocations through the commercial banks,” he said.

He urged the commercial banks to ensure that every deserving customer got their forex demand, adding that any bank found circumventing  the new system would be sanctioned.

“Once a customer presents all required documentation to purchase forex, the commercial banks should ensure they get the forex.

“Any customer that is denied should contact the CBN on 0700385526 or through the email- [email protected], ” he said.

The CBN governor stressed that the apex bank “will deal ruthlessly” with commercial banks that are collaborating with the BDCs who sell dollars at the black market.

“It’s a huge haemorrhage on our scarce resources,” Emefiele said, adding, “BDCs have turned themselves into agents that facilitate graft.” He assured that CBN would henceforth discourage the sale of forex to BDCs.