Nigeria central bank halts sale of forex to bureau de change

The Acting President of the Association of the Bureau De Change Operators, Alhaji Aminu Gwadabe, during an interview, said that the ban was not going to have any effect.

“Without the CBN’s support, it is unclear who will fund BDCs and to what extent”.

“The bank would henceforth discontinue its sales of foreign exchange to BDCs”.

“We are doing this to fast-track the importation of equipment you need for a speedy completion of that project and to encourage other Nigerians to follow your lead”, Emefiele said. The CBN sells US$60,000 to each BDC per week.

Ibrahim said: “The issue of N35 million deposit has to be revisited”.

“This will determine our next action”.

The CBN Governor accused the BDGs of undermining its efforts at managing the nation’s foreign reserves which continued to drop due to sharp drop in crude prices from a peak of US114 barrel in July 2014 to as low as US$33/barrel in January 2016.

“It does not favour us one bit”.

“There is cut of (dollar) supply to the market”.

“This is a huge haemorrhage on our scarce foreign exchange reserves and can not continue; we are also concerned that BDCs have become a conduit for illicit trade and financial flows, ” he said.

He however held that the policy pronouncement was not holistic, saying it did not really address the challenges in the forex market.

Another BDC operator, Ibrahim Kachalla, assured customers that the BDC segment would not collapse completely in spite of the new CBN policy.

In spite of the difficulties the CBN was facing, Mr. Emefiele said the BDCs totally disregarded the measures adopted to maintain the country’s FX reserves and safeguard the value of the Naira.

“We can survive because most of the dollars we trade with now are not CBN’s dollars”.

“People that had hidden dollars for a while and those whose business is to buy and keep dollars to sell at a later date to make profit, will be our source for now”.

“But with the restriction lifted, there is no way we won’t meet customers’ demands once they want to withdraw foreign currencies from their accounts”.

Regardless, he said the demand for foreign exchange by mostly domestic importers rose significantly, with the country’s average import bill then at N148.3 billion per month.

“However, by cutting forex sales to BDCs, there is also a risk that the parallel market will weaken even further than it already has, making those imports more expensive and increasing the incentive for rent-seeking behaviour”.