Currency Speculators in Tears as CBN Initiates Sales of FX to BDCs

Central Bank of Nigeria (CBN) in a letter sent to the president of the Association of Bureau De Change Operators of Nigeria on Monday 25th March 2024 disclosed sale of $10,000 to each BDC at the rate of N1,251/$1.

The apex bank in the letter mandated BDCs operators not to sell dollars for more than 1.5% of the given price making the rate not to be outrageous as carried out by greedy hoarders of foreign currency notes to give pressure to the naira.

In the past few days, naira has recorded gain against the United States Dollar (USD) and many speculators that bought dollar at high rate to predict that dollar rate may go up in detriment of naira  are now witnessing the opposite.

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The move by the Central Bank of Nigeria has brought changes in the naira rate as the offering to make available the sales of FX to BDCs to meet retail market demand for eligible invisible transactions may help naira to gain weight in the market if modalities are properly placed to ensure that BDCs don’t sale above 1.5% from the rate given by CBN.

In the letter signed by CBN Director of Trade & Exchange Department Dr. Hassan Mahmud, BDCs operators were warned any breaches to the terms will attract sanctions where appropriate.

Many Nigerians before the new policy came in have advocated for increase in local productions for exports instead of short time policies that only last for a moment and never sustainable. The likes of  Professor Ndubuisi Ekekwe, Professor Kingsley Moghalu the former CBN Deputy Governor and others have said that Nigeria government need to push harder to earn dollars through ensuring that Nigeria export many local products.

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For Prof. Ekekwe, he posited that Nigeria need many warehouses and factories that are producing local products for exports as a medium to make Naira a stronger currency in the world.

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