Wednesday, September 19, 2018
Advertisement

Naira at 43-year low after CBN’s BDC forex ban

Naira at 43-year low after CBN’s BDC forex ban
January 11
22:20 2016
Advertisement

The naira fell to a record low of 282 against the dollar on the parallel market on Monday, immediately after the Central Bank of Nigeria (CBN) announced its decision to halt sales of dollars to bureau de change operators.

This new price, which the naira closed at, is the lowest the currency has been since its introduction – on January 1, 1973 – 43 years ago.

On Monday, Godwin Emefiele, governor of the apex bank, declared that the bank would no longer sell forex to BDCs, which he referred to as “greedy” in their sales.

“Whereas the Bank has continued to sell US Dollars at about N197 per dollar to these operators, they have in turned become greedy in their sales to ordinary Nigerians, with selling rates of as high as N250 per dollar,” he said.

“The CBN sells US$60,000 to each BDC per week. This amount translates to US$167 million per week, and about US$8.6 billion per year.

“In order to curtail this reserve depletion, we have reduced the amount of weekly sales to US$10,000 per BDC, which translates into US$28.4 million depletion of the foreign reserve per week and US$1.476 billion per annum.

“This is a huge hemorrhage on our scarce foreign exchange reserves, and cannot continue especially because we are also concerned that BDCs have become a conduit for illicit trade and financial flows.”

He said the CBN “would henceforth discontinue its sales of foreign exchange to BDCs”.

Emefiele revealed that BDCs had risen from 74 in 2005 to 2,786 in 2016, with about 150 new BDC applications coming in every month, and same promoter owning multiple BDC outlets.

The naira, which was trading at with BDCs around 279 earlier in the day, fell to N282 immediately after the announcement, with BDC agents confirming expected increase during the course of the week.

RECEIVE ALERTS FROM THECABLE

BBM CHANNEL C0038F78B
WHATSAPP 08113975334
TWITTER @thecableng
Copyright 2018 TheCable. All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from TheCable.
Tags
Advertisement

Social Comments

2 Comments

  1. anonymous
    anonymous January 12, 11:53

    CBN and Mr. Emefiele have told a lot of half truths in their press conference/statement regarding stoppage of forex to BDCs. The sales figures quoted are outrageous. They’ve been selling $10k to maybe 15,000 BDCs. Did the BDCs license themselves? Why couldn’t CBN proscribe the greedy ones. Did CBN consider their investment of N35 million before asking them not to make money? CBN should find better avenues to manage the present economic realities and stop telling lies to the public!

    Reply to this comment
  2. zico
    zico January 12, 18:17

    CBN gov has no solutions to our problem and the managers of our economy too,we need the people with sound knowledge please to come forward

    Reply to this comment

Write a Comment

Your email address will not be published.
Required fields are marked *

*

Advertisement
Advertisement

Exchange Rates

September 18, 2018USDGBPEUR
INTERBANK360.45480.18420.32
LAGOS360485425
KANO361483423
PH362482423
ABUJA362481423
NOTE: The black market rates represent the most prevalent. They could be slightly higher or lower among different sellers.
Advertisement
Advertisement
Advertisement
Advertisement