• Exchanges N300 per dollar at black market

 

Efforts by the federal government through the Central Bank of Nigeria, CBN, to stabilize the Naira exchange rate which has been fluctuating in the last six months due to the dwindling inflow of foreign exchange as a result of falling crude oil price is being sabotaged by Bureau De Change operators.
Otherwise called “Black Market” operators, these forex dealers according to our investigations, are doing everything possible to stay on business at all cost.
As at the close of business yesterday, the local currency, Naira sank to a record low of 300 per dollar on the black market, two days after the CBN, stopped dollar sales to retail foreign exchange operators, including the BDCs.
The Naira, pegged at about 197 to the dollar on the official interbank market, sold between 292 and 300 at several bureau-de-change counters across the country, with fears that the rate may go higher as the days roll by.
However, this unofficial market window accounts for less than five percent of total dollar trades in Nigeria.
Meanwhile, stocks on Nigerian Exchange fell 3.6 percent to near a three-and-half-year low yesterday after the local currency hit a new trough of 300 per dollar on the black market, weighed down by sliding oil prices and the CBN’s decision to curb dollar supply.
Currency and stock markets have been hard hit by the persistent fall in crude, Nigeria’s main export, triggering a fall in government revenues and exit of foreign investors from the local bourse.
Brent crude, which gives Nigeria around 95 percent of its foreign earnings, fell to $30 a barrel for the first time in 12 years on Tuesday.
Head of Africa’s Strategy at Standard Chartered Bank, Samir Gadio, said “With the pressure on foreign reserves and oil prices at $30 per barrel, devaluation is now unavoidable. The issue will be the quantum and methodology.”
On Monday CBN stopped the sale of dollars to retail foreign exchange operators, saying they were using up the country’s foreign reserves for illegal transactions and selling the dollar above the bank’s official rate of N197.
Head of Nigeria’s bureau-de-change association, Aminu Gwadabe, said “The market is facing acute dollar shortages, even many people who want to buy at N300 cannot find the dollar.”
Another operator was however angry with the regulatory body the CBN, who he accused of not consulting his members before the ban was imposed.
CBN had while imposing the ban accused BDC operators of total “disregard of the difficulties that the Bank is facing in meeting its mandate of “maintaining the country’s foreign exchange reserves to safeguard the value of the Naira”, we have continued to observe that stakeholders in some of the subsectors have not been helpful in this direction”
“In particular, we have noted with grave concern that Bureau de Change (BDC) operators have abandoned the original objective of their establishment, which was to serve retail end users who need US$5,000 or less.
“Instead, they have become wholesale dealers in foreign exchange to the tune of millions of dollars per transaction.
Thereafter, they use fake documentations like passport numbers, BVNs, boarding passes, and flight tickets to render weekly returns to the CBN”, it stated.
According the CBN Governor, Godwin Emefiele, despite the fact that Nigeria is the only country in the world where the Central Bank sells dollars directly to BDCs, operators have not reciprocated the Bank’s gesture to help maintain stability in the market.
“Whereas the Bank has continued to sell US Dollars at about N197 per dollar to these operators, they have in turned become greedy in their sales to ordinary Nigerians, with selling rates of as high as N250 per dollar. Given this rent-seeking behaviour, it is not surprising that since the CBN began to sell foreign exchange to BDCs, the number of operators have risen from a mere 74 in 2005 to 2,786 BDCs today. In addition, the CBN receives close to 150 new applications for BDC licenses every month.
Rather than help to achieve the laudable objectives for which they were licensed, the Bank has noted the following unintended outcomes:
“Avalanche of rent-seeking operators only interested in widening margins and profits from the foreign exchange market, regardless of prevailing official and interbank rates;
“Potential financing of unauthorized transactions with foreign exchange procured from the CBN; “Gradual dollarization of the Nigerian economy with attendant adverse consequences on the conduct of monetary policy and subtle subversion of cashless policy initiative; and “ Prevailing ownership of several BDCs by the same promoters in order to illegally buy foreign currencies multiple times from the CBN.
“More disturbing, though, is the financial burden being placed on the Bank and our limited foreign exchange. The CBN sells US$60,000 to each BDC per week. This amount translates to US$167 million per week, and about US$8.6 billion per year. In order to curtail this reserve depletion, we have reduced the amount of weekly sales to US$10,000 per BDC, which translates into US$28.4 million depletion of the foreign reserve per week and US$1.476 billion per annum. This is a huge hemorrhage on our scarce foreign exchange reserves, and cannot continue especially because we are also concerned that BDCs have become a conduit for illicit trade and financial flows”.
In view of the above, the Management of the Central Bank of Nigeria decided to take the following decisions, which took immediate effect:
“The Bank would henceforth discontinue its sales of foreign exchange to BDCs. Operators in this segment of the market would now need to source their foreign exchange from autonomous source. They must however note that the CBN would deploy more resources to monitoring these sources to ensure that no operator is in violation of our anti-money laundering laws;
“The Bank would now permit commercial banks in the country begin accepting cash deposits of foreign exchange from their customers”.


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  • vic

    THE CENTRAL BANK OF NIGERIA(CBN) LED BY THE NOVICE AND PANICKY GOVERNOR, GODWIN EMEFIELE WHO WAS BROUGHT THROUGH THE BACK DOOR BY CORRUPT JONATHAN FOR HIS SELFISH ENDS AND WHICH HE TURNED INTO A PIGGY BANK FOR EVERY DICK AND HARRY WHO WERE ALLOWED TO WITHDRAW FOREIGN CURRENCY IN ANY AMOUNTS THROUGH DASUKIGATE AS WE NOW KNOW, HAS VERY INCONSISTENT AND PANICKY FOREX POLICIES WHICH ARE RESPONSIBLE FOR THE ON-GOING SLOW DEATH OF NAIRA.

    CAN CBN GOVERNOR TELL ME IF ONLY 5% OF THE FOREIGN EXCHANGE MARKET IS CONTROLLED BY THE PARALLEL MARKET (BLACK MARKET) THEN HOW IS IT THAT THE DEPOSIT BANKS IN NIGERIA OF WHICH GODWIN EMEFIELE IS THE CHAIRMAN SELLING FOREIGN EXCHANGE TO THEIR OVERSEAS CUSTOMERS USING NAIRA DEBIT CARDS ARE SELLING NAIRA EXCHANGE AT THE BLACK MARKET RATE OF N280 FOR A DOLLAR AND AROUND N400 FOR A BRITISH POUND STERLING???? IN THIS REGARD, IT IS THE GOVERNOR OF THE CENTRAL BANK OF NIGERIA, MR GODWIN EMEFIELE, WHO IS ALSO THE CHAIRMAN OF THE DEPOSIT BANKS (DBS) IN NIGERIA, IS AIDING AND ABETTING FOREIGN EXCHANGE FRAUD IN NIGERIA UNDER HIS VERY NOSE ALLOWING THESE BANKS TO SELL DOLLARS AND POUND STERLING AT SUCH DISTORTED HIGH RATES WHILE GODWIN EMEFIELE CONTINUES TO TELL NIGERIANS EVERY DAY THAT OFFICIAL DOLLAR RATE AT WHICH THESE DBS SHOULD PRACTICE IS 197 NAIRA TO A DOLLAR AND N287 TO A BRITISH POUND.

    IN VIEW OF THE ABOVE SAGA, IT SEEMS THE GOVERNOR OF CENTRAL BANK IS A PART OF THE 5% BLACK MARKET OPERATORS OTHERWISE HOW CAN HE ALLOW THE DBS TO SELL DOLLARS AND POUNDS AT SUCH EXORBITANT RATES. CENTRAL BANK GOVERNOR IS CLEARLY AT THE CENTER OF THIS FOREX FRAUD AND MUST BE SACKED FOR THIS FRAUD IF NOT CALLED TO ORDER BY BUHARI.
    IF YOU LOOK BACK ON THE RECORDS OF THIS MAN MR GODWIN EMEFIELE, HE HAS ALWAYS WORKED FOR THE INTEREST OF THE DBS AND ALWAYS OPENLY ENCOURAGED THE DEVALUATION OF NAIRA. MR EMEFIALE HAS SHUT HIS EYES TO THE MALPRACTICES OF THE DBS IN RELATION TO FOREIGN EXCHANGE TRANSACTIONS WITHE THESE DEPOSIT BANKS IN NIGERIA. HE HAS LOST ALL CONTROL ON THESE COMMERCIAL BANKS AND IS OPENLY AIDING AN ABETTING FOREX FRAUD BY THESE BANKS ON THE RELEASE OF FOREIGN EXCHANGE TO CUSTOMERS AT THE BLACK MARKET RATES.

    • MUkintu

      Are you out of your mind? What has the CBN governor got to do with falling oil prices? You Nigerians have seen nothing yet. The naira will be like the former Ghananian cedi very soon and you may need a truck to go and change just $100.00. The wealth of Nigeria has been stolen and you are blaming the bank governor. Have you forgotten where Mr Emefiele was before he became CBN governor? You stupid Nigerian ass-hole.

      • vic

        i do not blame you for your foul language, you have been obviously brought up by an ass-hole abusive family of beastly character, no training, low-life mentality and bad attitude when addressing others on this forum.

  • vic

    NO THEY DON’T BUT THE CBN GOVERNOR, GODWIN EMEFIELE DOES THROUGH HIS SCATTERED AND INCOHERENT FOREX POLICIES.