Naira Falls Again As BDCs ’ Dollar Supply Falls To $8,000

By Ikenga Chronicles November 25, 2016
The naira fell further to N475 against the dollar on the parallel market yesterday from N471/$1 last Wednesday.This is so because the weekly amount Travelex and selected banks that were allowed to sell to Bureaux De Change (BDCs) was reduced from $15,000 to $8,000.
The Naira was initially gaining a balance of N304 and N305.50 against the dollar on the official interbank market but closed at N305/$ at the official market yesterday.
President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, has stated that the reduction in dollar sales to BDCs was as a result of the need to ensure that more BDCs in the country are able to access dollars.
His words “The amount of dollars sold had to be reduced so that it can get to more BDCs across the country. Dollars are now being sold to BDCs in Awka and Onitsha. Also, the total amount that Travelex brings to sell has not increased.”
He lamented the reduced supply of dollar to BDCs due to the the harsh control rate by the CBN on its operators. Dealers fear further decline of the naira despite sale at CBN controlled rate of N400/$ due to raids by agents of the State Security Service (SSS) on operators in that market.
It would be recalled that the  SSS commenced the action on November 9, raiding BDCs, parallel market street traders and instructing them to cap their rates at N400 per dollar. As a result, people are hoarding dollars rather than selling at an artificially low rate, forex dealers said.
Meanwhile  the Governor of the apex bank, Mr. Godwin Emefiele, has thrown his weight behind the raids, saying last Tuesday : “The security agencies should sustain their checks on the activities of illegal foreign-exchange operators in order to bring sanity to that segment of the market.”
Analysts at Afrinvest West Africa Ltd have argued that the raids will push the operators underground thereby creating a parallel market within the black market.
An analyst at Afrinvest, Omotola Abimbola, was quoted as saying: “The black market will go further underground.The fact they went as low as getting security forces on the streets shows a new level of desperation.”
JPMorgan Chase & Co. was reported as saying that the development is another signal to foreign investors that Nigeria’s currency policy is broken.
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