CBN increases BDCs allocation to $10,000/week – The Central Bank of Nigeria CBN) will from Monday, April 3, 2017 commence twice weekly FOREX sales to licensed Bureaux de Change (BDCs) in the country. A statement by the Bank’s Acting Director, Corporate Communications Department, Isaac Okorafor, disclosed that weekly sale amount has been increased to $10, 000 (i.e. $5000 per bid). Initially, the bank was allocating $8,000 once every week. On Monday the Apex bank has reduced the rate to BDCs from 390 to 360/$. The statement further disclosed that licensed BDCs are henceforth required to fund their accounts with the CBN on Mondays and Wednesdays while they receive their purchases on Tuesdays and Thursdays, respectively. According to Okorafor, this strategic move is aimed at ensuring wider spread and liquidity in the market to Deposit Money Banks as well as BDCs. Meanwhile, the CBN on Thursday, March 30, 2017, offered the total sum of $100 million to authorized dealers to service forwards request by wholesale customers in the interbank market.
The increase of allocation to the Breaux de Change BDCs as the CBN continuous intervention to the Forex challenge.
In my own view, this intervention is not enough to strengthen the Naira which is widely commended cannot be a solution to the problem. I remember when the Naira was 155 to Dollar, the allocation was around $200,000/weekly. this current policy will not solve the demand problem, beside there is no production and most industries are shorting down as a result of power supply and cost of raw materials,this can only solve a temporal challenge in the economy.
This new policy can only work when the Federal government is able to fix the critical sectors of the economy. Investors are not confidence of the economy and they finding difficult to invest and this is affecting the Naira. Speculators are ever ready to buy and sell the dollars, while some are actually storing it to resell when scarcity looms. Itwas
also reported that some directors in the Apex bank are involve in the manipulation of the Forex, and are currently under investigation. Because of this unwarranted activities if not properly check can return a looming danger into the institution. Most of this officials would stuck the dollars and bring it out for speculation purposes when scarcity returns. They are aware that scarcity will surely return as the intervention can only do a little solving the problems. We need the government to also look at the issue of security so as to encourage investors into the country.
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