L
LequteMan
Guest
The Central Bank of Nigeria, CBN, has banned the sale of foreign exchange to Bureaux de Change operators in the country.
At a press briefing on Monday, CBN governor, Godwin Emefiele, condemned the activities of the operators before announcing the apex bank's decision.
Here's exactly what he said:
"In total disregard of the difficulties that the Bank is facing in meeting its mandate of “maintaining the country’s foreign exchange reserves to safeguard the value of the Naira”, we have continued to observe that stakeholders in some of the subsectors have not been helpful in this direction.
"In particular, we have noted with grave concern that Bureau de Change (BDC) operators have abandoned the original objective of their establishment, which was to serve retail end users who need US$5,000 or less. Instead, they have become wholesale dealers in foreign exchange to the tune of millions of dollars per transaction. Thereafter, they use fake documentations like passport numbers, BVNs, boarding passes, and flight tickets to render weekly returns to the CBN.
"Despite the fact that Nigeria is the only country in the world where the Central Bank sells dollars directly to BDCs, operators in this segment have not reciprocated the Bank’s gesture to help maintain stability in the market. 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.
"Given this rent-seeking behaviour, it is not surprising that since the CBN began to sell foreign exchange to BDCs, the number of operators have risen from a mere 74 in 2005 to 2,786 BDCs today. In addition, the CBN receives close to 150 new applications for BDC licenses every month.
He thereafter went on to announce CBN's decision banning sale of foreign exchange to the operators.
Nigerians will hope that this development shoots up the value of the Naira.
At a press briefing on Monday, CBN governor, Godwin Emefiele, condemned the activities of the operators before announcing the apex bank's decision.
Here's exactly what he said:
"In total disregard of the difficulties that the Bank is facing in meeting its mandate of “maintaining the country’s foreign exchange reserves to safeguard the value of the Naira”, we have continued to observe that stakeholders in some of the subsectors have not been helpful in this direction.
"In particular, we have noted with grave concern that Bureau de Change (BDC) operators have abandoned the original objective of their establishment, which was to serve retail end users who need US$5,000 or less. Instead, they have become wholesale dealers in foreign exchange to the tune of millions of dollars per transaction. Thereafter, they use fake documentations like passport numbers, BVNs, boarding passes, and flight tickets to render weekly returns to the CBN.
"Despite the fact that Nigeria is the only country in the world where the Central Bank sells dollars directly to BDCs, operators in this segment have not reciprocated the Bank’s gesture to help maintain stability in the market. 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.
"Given this rent-seeking behaviour, it is not surprising that since the CBN began to sell foreign exchange to BDCs, the number of operators have risen from a mere 74 in 2005 to 2,786 BDCs today. In addition, the CBN receives close to 150 new applications for BDC licenses every month.
He thereafter went on to announce CBN's decision banning sale of foreign exchange to the operators.
Nigerians will hope that this development shoots up the value of the Naira.
