The Naira has come under fresh pressure in the parallel
market having depreciated to N473 per dollar following the decision of the
Central Bank of Nigeria (CBN) to slash dollar sales to Bureaux De Change (BDCs)
by 46 per cent. Financial Vanguard investigations revealed that last week, the
CBN sold $8,000 to each BDC through Travelex Nigeria Limited.
This represents 46 per cent decline when compared to $15,000
usually sold per week to each BDC.naira-dollar Confirming this development to
Financial Vanguard, Chief Executive Officer of H.J Trust BDC, Mr. Harrison Owoh
said the reduction came as a surprise to the market.
He said this was contrary to the general expectation that
the dollar sale will be increased to $20,000 per BDC. “That is why the currency
is under pressure with the rate going up.”
Why CBN reduced dollar sales
Also confirming the development to Financial Vanguard,
Chairman, South West Zone, Association of Bureaux De Change Operators of
Nigeria (ABCON), Mr. Taiwo Ebenezer said that the reduction in dollar sales was
done to accommodate BDCs in other zones of the country.
He said: “The dollar sales have been limited to BDCs in
Lagos and Abuja, but ABCON recommended to CBN to find a way to accommodate BDCs
in other zones.
That is what the CBN has done though the reduction in supply in
Lagos and Abuja has prompted the exchange rate to go up.” He added that the CBN
will definitely consider the impact on the rates and take a decision on whether
to keep it at $8,000 per BDC across board or increase the quantity sold per
BDC.
DSS intensifies raids
Financial Vanguard investigations also revealed that the
operatives of the Department of State Securities (DSS) have intensified raids
on illegal currency traffickers in Lagos and Abuja, thus driving the parallel
market further underground.
Speaking to Vanguard on condition of anonymity, a top BDC
operator told Financial Vanguard: “They now come regularly to locations where
these people usually operator from. About five of them (DSS operatives)
recently visited this area but they didn’t come into the offices of licensed
BDCs.
They are targeting the unlicensed and illegal operators. But
everybody is careful now. You only deal with people you know except where they
have their documentation. The only problem is that it is difficult to get the
exchange rate that reflects the true position of the market.
People quote different rates depending on the person they
are dealing with and the source of the dollar. That is how we now operate”.
Financial Vanguard investigation reveals that due to the intensity of the DSS
raids, some licensed BDCs have issued letters warning their staff against any
form of interaction with street currency hawkers or involvement in such
transactions.
“We don’t deal in parallel market transaction; we don’t even
know what the parallel market rate is. We have issued letter to our staff
against such transactions, that it is against company policy to be involved
with or even discuss parallel market transactions”, a top official of an Abuja
based BDC told Vanguard.
CBN justifies raids
Recently, the CBN Governor justified the DSS raids on
illegal currency traffickers saying the nation’s foreign exchange laws forbids
street trading of foreign currency. Addressing the press at the end of the
meeting of the Monetary Policy Committee (MPC), Emefiele said that the DSS had
the right to enforce the law and make sure that currency hawkers were forced
out of the “illegal trade.”
The Governor, who said it was demeaning for traders to hawk
currency on the streets, urged the traders to legalise their business by
applying for Bureau De Change (BDC) license.
In the communiqué issued at the
end of its meeting the MPC called on security agencies to sustain the raids,
saying: “The MPC believes that the security agencies should sustain their
checks on the activities of illegal foreign exchange operators in order to
bring sanity to that segment of the market.
Source:Vanguard
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