Central Bank of Nigeria has ban the selling of Forex to BDC's and have also lifted ban on cash deposits to dom accounts

Godwin  Emefiele, governor of the central bank

of Nigeria (CBN), says the apex bank will no
longer sell foreign exchange to bureau de
change operators, whom he regarded as being
greedy. Emefiele said the CBN would now allow
commercial banks to accept cash deposits of
foreign exchange from their customers. “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,” he said.
“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. “Despite the fact that Nigeria is the only
country in the world where the Central Bank
sells dollars directly to BDCs, operators in this
segment 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 turn become greedy in
their sales to ordinary Nigerians, with selling
rates of as high as N250 per dollar.” He said the
BDCs had risen from 74 in 2005 to 2,786 in
2016, with about 150 new BDC applications
coming in every month, with same promoter
owning multiple BDC outlets.
“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.” He said that following the
alleged activities of the BDCs, the CBN “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 to begin accepting cash deposits
of foreign exchange from their customers.” The
CBN sold dollars to BDC operators for the better
part of 2015, in its bid to keep the official and
unofficial price of the naira close to each other.
A BDC agent who spoke to TheCable in Lagos
said he had been debited on Monday for
bidding for foreign exchange, unclear as to
whether he would get forex or not.