Central Bank of Nigeria Governor, Godwin Emefiele has said commercial banks in the country have been permitted to begin accepting cash deposits of foreign exchange from their customers. This was disclosed in a press briefing yesterday in Abuja.
The new rules will allow customers deposit foreign exchange in cash directly into local banks while the CBN will no longer sell Forex directly to Bureau De Change, BDC operators in the country.
Emefiele explained that the measures are part of steps being taken by the CBN to reduce the pressure on the naira, which has been under pressure against major foreign currencies in the parallel market.
Nigerian banks started rejecting cash deposits in foreign currencies into domiciliary accounts a few months back because they felt that the level of Forex that they had in their vaults was above the optimum level that they could manage. The CBN had backed the decision.
Emefiele said that the action was in response to the depreciating foreign reserve of the country as a result of falling oil price in the international market and the uncomplimentary attitudes of official channels of foreign exchange market operators.
According to him, “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 CBN Governor, however, explained that the measure was meant to ensure that the CBN is able to carry out its mandate in an effective and efficient manner, which guarantees preservation of our scarce commonwealth, and that our hard-earned financial system stability remain intact to the benefit of all Nigerians. He accused BDC operators of abandoning 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,” he said.
“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.”
He decried the financial burden being placed on the Bank and limited foreign exchange through the activities of the BDC operators. He said that 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. And in order to curtail this reserve depletion, CBN 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. But the problem still persists. Following that he said that the scarce foreign exchange reserves, and cannot continue to shoulder it especially as BDCs have become a conduit for illicit trade and financial flows.
According to him, “as of June 2014, the stock of Foreign Exchange Reserves stood at about US$37.3 billion but has declined to around US$28.0 billion as of today.” “Following the drop in crude prices from a peak of US114 barrel in July 2014 to as low as US$33/barrel in January 2016, the country’s reserves has suffered great pressure from speculative attacks, round tripping and front loading activities by actors in the FX market.”


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  • vic

    CBN GOVERNOR, MR GODWIN EMEFIELE, THIS RELAXATION ON FOREX ACCOUNT SHOWS, YOU HAVE NO STABLE FOREX POLICY IN THE CBN. YOU HAVE NOW TURNED INTO A ROLLING BALL WITH UNENDING ROLLINGS INTO ANY DIRECTION OF FOREX MARKET. REST ASSURED, YOU HAVE A LONG WAY TO GO BUT STILL, AS YOU KNOW, YOU WERE BROUGHT IN BY CLUELESS JONATHAN THROUGH THE BACK DOOR FOR THE SOLE PURPOSE OF LOOTING THE CBN, WHICH HE VERY SUCCESSFULLY DID UNDER YOUR VERY NOSE, AS WE NOW KNOW, THROUGH DASUKI ARMS GATE OF 2.1 BILLION DOLLARS. WITH YOU BEING THE MAIN ARCHITECT OF THAT, YOUR DISMISSAL BY BUHARI IS NOW OVERDUE WITH IMMINENT SACK. MR EMEFIELE, TRY TO LOOK FOR A JOB SO THAT YOU CAN CONTINUE TO HAVE YOUR BREAKFAST AND PAY YOUR MONTHLY HOUSE RENT.

    I AM DETERMINED TO REPLACE YOU ONE DAY TO MAKE ONE DOLLAR EQUAL TO ONE NAIRA WITH THE HELP OF MY DAURA FRIEND, BUHARI.

    • Rev Elenewa Suny

      the cbn governor has not comitted any crime to deserve this comment