Naira sees biggest plunge after CBN FX ban as BDCs seek truce
By Olaleye Aanuoluwapo, Abuja
Weeks the Central Bank of Nigeria (CBN) suspended Foreign Exchange (FX) sales to Bureau De Change (BDC) operators for allegedly facilitating money laundering and other infractions, the Naira has depreciated significantly against the Dollar at the parallel market.
Naira crashed by about five per cent, as the weakening of the BDC operations weighed heavily on the market, and raising concern about the near-term outlook of the local currency.
During the weekend, it was gathered that Naira traded at N530 against the Dollar, inching towards N550 against the Dollar in Abuja. Before the new decision, the Naira was stable at about N503 against the Dollar.
The apex bank had in July, announced stoppage of sale of foreign exchange to BDC operators, whom the Governor, Godwin Emefiele, accused of anti-market activities and serving as “money laundering agents.”
It will be recalled that the CBN had been supplying each licensed BDC $10,000 per week at the rate of N393 with the instruction that they should sell with a margin of N2 but some of them sell as high as N505, making over N100 on every Dollar sold.
An operator in Suleja Dauda Usman disclosed that he buys Dollar around N507 and N510 while he sells around N512 and N513.
Nigerian NewsDirect gathered that traders, who are still shocked about the CBN’s decision, are reaching out to the apex bank for a truce.
Mallam Yessuf Abubakri, a top trader in Maitama said there is hope the CBN might revise its decision.
Another renowned trader in Suleja, Garba Usman, disclosed that the Association of Bureau de Change of Nigeria is making numerous efforts to control illegal trading of foreign exchange especially during weekends.
A top executive of the Association of Bureau de Change of Nigeria (ABCON), who spoke to journalists on the basis of anonymity, revealed that leaders of the body have been having meetings to deliberate with the CBN.
He described the announcement as an “administration fiat,” highlighting that it was not true to dismiss BDCs as irrelevant to the economy.
“We are waiting to see how effective this will be. We are also trying to speak with them. Honestly, we don’t have a position until after the meeting. If the Dollar depreciates by about six per cent in 24 hours, we should be worried,” the source said.
