CBN Suspends 19 Banks from Forex Sale to BDCs

Reports have it that the apex bank has banned commercial banks from selling forex to the black marketers to arrest the free fall of the local currency. 

The Central Bank of Nigeria (CBN) has suspended all the banks, with exception of First Bank, from selling dollars proceeds of international money transfer services (IMTS) to Bureaux De Change (BDCs).

Two months ago, the CBN had directed banks to sell proceeds of their international money transfer services to BDCs. This was in a bid to address the steady and sharp depreciation of the naira in the parallel market.

 

Vanguard investigation however revealed that most of the banks were not complying with this directive, preferring to do brisk business with the proceeds.

This generated several complains from the BDCs, with the Association of Bureaux De change Operators of Nigeria (ABCON) calling for a review of the policy measure. Reporters reliably gathered that the CBN decided to sanction the banks following investigation which revealed most of the were either not complying or were circumventing the directive.

 

There is no official report from CBN concerning the rumoured ban. It would be recalled that the apex bank has licensed Travelex to issue foreign exchange to the parallel market.

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IMF Advises Buhari over Forex Policy

IMF has advised President Muhammadu Buhari on its forex policy to help alleviate the economic downturn currently faced in the country.

Christine Lagarde, managing director of the International Monetary Fund (IMF), says Nigeria’s economic situation is alarming, calling for a flexible exchange rate regime.

Speaking on the World Bank/IMF special edition of BBC’s HardTalk anchored by Stephen Sackur, Lagarde said Nigeria has a huge potential, especially in her youth.

Largade maintained that IMF was ready to help Nigeria, appealing to President Muhammadu Buhari to take steps to move in the direction of “flexible exchange rate”.

“We are not suggesting that flexible exchange rate is the panacea in all cases, but in this particular instance, we believe that it would help,” she said.

“I know it is going to be difficult, and we very much hope that the Nigerian government under the leadership of President Buhari will be able to distinguish the value of moving in that direction, rather than causing the circumstances that can precipitate, a much more difficult decision making process at some stage.

“We remain completely available to help, we believe that it is doable, it can be address.” Lagarde Sackur

She described Nigeria as a great country with huge potential, but decried the current economic situation.

“Nigeria has very strong resourceful and great people. The right policy mix is needed, which include, in our view, flexible exchange rate,” she said.

“Nigeria is one of those countries where there’s huge potential, fantastic youth but also a very alarming economic situation. It is heavily dependent on the oil resources.

“Both in terms of fiscal revenue and exports. As a result of that, we have gone public and actually gone to the senate of Nigeria to explain our views, we believe that a more flexible exchange rate is in the interest of the Nigerian population.

“If that doesn’t happen, we would continue to see the dual exchange rate, and putting in place a list of those product and services that are forbidden in Nigeria for import purposes, cannot be a substitute to a more flexible exchange rate.”

 

 

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