The CBN’s thunderous strike on the operational pattern of the Bureau De Change regarding foreign exchange is yet to settle as the Naira tip-toed backward in a move to make significant gains against the US dollar.
On August 10, 2021, it showed signs of improvement in the parallel market, selling for N510 against $1. But leap-jumped back to N515/$1, the exchange rate it had maintained till the date.
At the time of publication, $1 was N515 on the streets, although it’s N410.12 at the CBN official rate.
On July 27, the central Bank of Nigeria (CBN) announced that it stopped the weekly sales of forex of $20,000 to each of the over 5,000 Bureau De Change operators in the country, describing their activities in the market as counter-productive to the policy of the CBN and the Nigerian state.
Godwin Emefiele, the apex bank’s governor subsequently revealed that the weekly allocation to the BDCs would henceforth be diverted ( https://infomediang.com/cbn-pumps-more-dollars-to-banks-to-meet-high-forex-demand ) to the commercial banks to boost their forex sales for those who need fx for PTA, BTA, medicals, and school fees.
The decision sparked reactionary demand, thereby culminating in scarcity at the parallel market.
Although the association of BDCs boasted that the announcement of the CBN would not deter them from their business.
The scarcity is expected at the parallel market, the reason for the unstable demand and price.
While the CBN mandated the commercial banks to set forex teller points ( https://infomediang.com/forex-teller-points-nigeria ) at all their branches for those who need them for essential needs, there are still people who need them at the parallel market.
What does this mean?
The scarcely available dollars in the parallel market means that the BDCs still need the support of the CBN to survive in the fx market, though analysts believed that the hardship the new policy would cause is temporary.
It also means that parents whose kid is in a foreign institution may have to patronise the BDCs to meet exigencies of the fx needs of their kids abroad unless the new CBN makes provision for such emergency needs.
While the operators claimed to be making moves to sanction erring members caught violating or dealing in illegal fx activities, the commercial banks will have to step up their game to build trust in those who need dollars for legal activities and other needs as stipulated by the apex bank.