CBN: Naira Stabilises After Ban Of Forex Sale To BDCs

By James Orji

Central Bank Governor, Godwin Emefiele says the Naira has remained stable since the ban of foreign exchange sale to bureau the change, BDCs in the country.

Emefiele spoke on Thursday during the CBN’s 32nd Seminar for Finance Correspondents and Business Editors on Thursday in Akure, Ondo.

Not many will agree with the apex bank on this but Emefiele said the situation has change since it stopped selling forex to BDCs last year after accusing some operators of supporting terrorism and criminality. The Emefiele-led government bank had also accused BDCs operators of making exorbitant margins as middlemen between the apex bank and forex buying public.

The Association of Bureau De Change Operators of Nigeria, ABCON said last year February that close to 50 members have been arrested by security operatives, over alleged unlawful foreign exchange transactions. More operators have since been arrested and are now being tried for terrorism and other criminal offences, the CBN said.

The apex bank said the clamp down on BDCs has yielded positive results as it has noticed a significant stability in the value of Naira to the Dollar, particularly at the Investors and Exporters Window, I&E.

The situation is quite different at the black market, close market watchers insist, where the national currency is now being exchanged for close to N584 per dollar since last week, while the naira and the US dollar exchange rate remained unchanged at N417 to the Dollar.

The Dollar was exchanged for N500 at the time the CBN took the decision to ban sale of forex to BDCs last July. The apex bank has since been selling directly to commercial banks on very strict conditions.

But the CBN Governor who was represented at the conference by Edward Adamu, Deputy Governor, said the decision to ban sale of forex to BDCs has really paid off.

Emefiele said, “As a result of our demand management policy, the naira has remained largely stable at the I & E window, particularly since the discontinuation of FX allocation to Bureau De Change operators along with the convergence between the CBN and NAFEX rates.

“Banks are now able to meet the demands of their customers seeking forex for SMEs, school fees, medical and PTAs,”

“The Central Bank of Nigeria had also sanctioned Bureau De Change (BDC) operators for illegal forex trading and discontinued the sale of forex to the Bureau operators in Nigeria.

“In addition, licensing of new BDCs was suspended. The CBN also introduced the ‘Naira 4 Dollar Scheme’ to encourage diaspora remittances.

“It is heartening to note that these policies are yielding positive results in terms of meeting genuine demand for foreign exchange and exchange rate stability,” the CBN Governor said