CBN To Resume FOREX Sales To BDC’s On Monday

 

The Central Bank of Nigeria has said that it will resume sales of foreign exchange to operators of Bureau de Change (BDCs) from Monday, September 7, 2020.

According to a statement from the apex bank on Wednesday, the decision to inject liquidity into the FOREX market is crucial to boosting the naira against the dollar.

It added that the sale will be gradual and done twice a week while stressing that the interventions made in the Investors and Exporters (I&E) window will plunge market speculators into losses following their failure to heed to warning signs from the CBN.

Speaking on the issue, the Director, Corporate Communications Department at the CBN, Isaac Okorafor, said the sale will be done “twice a week – Mondays and Wednesdays, hence the BDCs had been directed to ensure that their accounts with their banks are adequately funded to ensure seamless transactions.”

While warning speculators to desist from what he termed unpatriotic tendencies, Okorafor urged registered BDCs to comply with the CBN guidelines as the Bank would not hesitate in sanctioning any erring dealer.

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He also assured that those requiring foreign exchange for purposes of travel, educational fees, and other Invisibles could obtain such over the counter from their respective banks.

The naira began to rebound against the dollar, exchanging for N420 to a dollar in the BDC segment of the market on Wednesday, after trading for as high as N480 to the dollar on Monday in the I&E window, prompting fears that the Naira was in a free fall.

Meanwhile, the President of the Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe has expressed support for the CBN action, noting that the anticipated intervention in the BDC sector would ensure stability in the foreign exchange market.

According to him, speculators in the forex market have been dealt a huge blow with the sharp drop in the exchange rate, which he said would continue a downward trend with the resumption of international flights in and out of the country.

The apex bank had in March this year, suspended the sales of foreign currency to Bureau De Change operators (BDCs) in the country, for two weeks, following a request by the BDC for the CBN to grant them a two-week holiday as a measure to control the spread of the Coronavirus outbreak.

Recently, the Federal Government announced that it will open its airspace for international flights to resume on September 5, 2020.

CBN Raises BDC Exchange Rate To N385 Per Dollar

forex, CBN, bureau de change, exchange rate, Central bankThe Central Bank of Nigeria has raised the exchange rate for bureau de change operators to 385 naira per dollar.

This move is to encourage Nigerians in diaspora to use official channels to transfer earnings back home.

Prior to the announcement, the CBN allows BDCs to buy at 375 naira per dollar and sell at 381 naira per dollar.

In the meantime, the naira appreciated at the interbank foreign exchange market in response to intervention by the CBN.

The regulator sold 1.5 million dollars to stabilize the interbank exchange rate.

The local currency appreciated to 305 naira 5 kobo at the interbank and 455 naira to the greenback at the parallel market.

Meanwhile the CBN is also expected to license 20 new international money transfer operators in the coming weeks to handle an estimated 21 billion dollars annual diaspora remittances into the country.

This is part of efforts to stabilise the foreign exchange market.

The President of the Bureau De Change Operators of Nigeria, Mr Aminu Gwadabe, believes the CBN’s policy on IMTOs will boost diaspora cash inflow into the country and force the dollar rates against the naira down.

The CBN had in August 31, licensed 11 IMTOs in addition to Western Union, Moneygram and RIA, which were earlier cleared by the regulator.

Recapitalisation: CBN Clears 128 BDCs

BDCsData released by the Central Bank of Nigeria show that 2,964 bureau de change operators have scaled through the recapitalization process mandated by the regulator.

According to a circular posted on the CBN website, 128 BDCs recapitalised in the last one week.

The apex bank is expected to refund nearly 100 billion naira to all the BDCs that paid the mandatory 35 million naira caution deposit which was scrapped last week.

In the meantime, the President, Association of Bureau De Change Operators of Nigeria, Mr Aminu Gwadabe described the cash refund as a welcome development, as it will go a long way in boosting the capacity of operators to stay in business.

 

CBN Insists No More Sale Of Forex To BDCs

CBNThe Central Bank of Nigeria (CBN) will not back down on its decision to stop the sale of foreign exchange to Bureau De Change (BDC) operators.

The CBN’s Director of Monetary Policy, Mr Moses Tule, made the statement on Thursday while speaking on Channels Television’s Sunrise Daily.

He said that the BDC operators have abandoned their primary functions, stressing the need to protect the Naira and conserve the depleted foreign reserves.

“We have Bureau De Change that are making huge volume transactions in foreign exchange, contrary to the terms of their licence,” he said.

The CBN official also noted that the BDC operators have taken a life of their own, saying they took actions that threatened the decision of the CBN.

“The Association of Bureau De Change Operators, which is supposed to serve as a self-regulating association, has taken on an entire life of its own and they act as a trade union, making demand that the Central Bank reverses its policy,” he said.

But the acting President of the BDC operators, Aminu Gwadabe, has expressed displeasure with Mr Tule’s claims.

He insisted that the operators are professionals who were being unfairly treated by the CBN.

“The Central Bank licensed Bureau De Change operators only contribute five per cent in the market (that is their market share). The other 95 per cent is being shared among the banks, the Central Bank and the street hawkers (these are the players in the market),” he said.

Mr Gwadabe wondered how a sector that only play five per cent would control the activities of the market.

“Our concern is not to fight the CBN policy, our concern is not to constitute ourselves as a trade union, (but) we are a professional organisation,” he said, maintaining that the group is a professional organisation.

Bureaux The Change Operators Appeal To Senate Over Raised Capital Base

7The Association of Bureau De Change Operators in Nigeria has sought the intervention of the Senate Committee on Finance over the decision of the Central Bank of Nigeria (CBN) to raise the capital base of operators from ten million to 35 million Naira.

At a meeting with members of the committee on Tuesday, the Acting President of the association, Mr Aminu Gwadabe, said that the policy would worsen the prevailing unemployment if eventually implemented.

The Acting President said the reasons cited by the CBN for the new policy were not tenable.

According to him, the argument that bureau the change operators’ aid the depletion of the foreign reserve does not hold water as the percentage of dollars sent to operators had been declining since 2012.

The House of Representatives had last week summoned the Central Bank Governor, Godwin Emefiele, over the new capital base, expressing worries that the new policy would send most of the operators out of business and asked the apex bank to suspend the new policy which members tagged elitist.

The CBN  reviewed its guidelines on 26 June, which includes an increase in minimum capital requirement for operation from the current 10 million Naira with effect from 15 July.

The apex bank’s reasons for the review was to correct observed deficiencies in the operation of the Bureau De Change in Nigeria which they say had led to sharp practices in the foreign exchange market. The apex bank also said it would help check the depletion of external reserves, financing of unauthorised transactions and ‘dollarization’ among others.