CBN reduces dollar supply to BDCs by 46%

By Ikenga Chronicles November 28, 2016
The Central Bank of Nigeria (CBN) has decided to reduce sales of dollar to Bureaux De Change (BDCs) by 46 per cent, report says.This however is the reason why pressure mounts on the naira in the parallel market which depreciated ‎to N473/ $.
Investigation as revealed by Vanguard states that the CBN sold $8,000 to each BDC through Travelex Nigeria Limited which represents 46 per cent decline when compared to $15,000 usually sold per week to each BDC. ‎Chief Executive Officer of H.J Trust BDC, Mr. Harrison Owoh who confirmed the development said the reduction was a surprise because an increase to $20,000 per BDC was anticipated.
“That is why the currency is under pressure with the rate going up.” he said
Meanwhile, Chairman, South West Zone, Association of Bureaux De Change Operators of Nigeria (ABCON), Mr. Taiwo Ebenezer said that the reduction in dollar sales was done to accommodate BDCs in other zones of the country.
His words: “The dollar sales have been limited to BDCs in Lagos and Abuja, but ABCON recommended to CBN to find a way to accommodate BDCs in other zones. That is what the CBN has done though the reduction in supply in Lagos and Abuja has prompted the exchange rate to go up.”
He added that the CBN will definitely consider the impact on the rates and take a decision on whether to keep it at $8,000 per BDC across board or increase the quantity sold per BDC.
However, the raid by the Department of State Services(DSS) on illegal dollar traffickers in Lagos and Abuja continues which drives the parallel market underground.
A top BDC operator who spoke on the condition of anonymity said “They now come regularly to locations where these people usually operate from. About five of them (DSS operatives) recently visited this area but they didn’t come into the offices of licensed BDCs.”
“They are targeting the unlicensed and illegal operators. But everybody is careful now. You only deal with people you know except where they have their documentation.”
“The only problem is that it is difficult to get the exchange rate that reflects the true position of the market. People quote different rates depending on the person they are dealing with and the source of the dollar. That is how we now operate”.
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