Fakoyejo OlalekanThe United States currency, Dollar, and that of Nigeria, Naira, held tight to their ground on Friday, trading at the same previous rates across the official foreign exchange market, Investors & Exporters (I&E) window, as well as the black market.
On Thursday, sellers at the Investors & Exchange window had sold a dollar for N420.50 at the close of business hour. They extended sales at the same rate the next day, with the naira neither appreciating or depreciating.
Surprisingly, the story was the same in the black market, where naira has been plunging in value days before. At the end of trading on Friday, both currencies exchanged at the rate of N617/$1, the level they traded for the previous day.
The naira halted its losses across the foreign exchange markets as the Central Bank of Nigeria (CBN) ban on Bureau De Change (BDC) operators nears one year anniversary. The apex bank had banned sale to the group on July 27, 2021.
The decision by CBN governor, Godwin Emefiele, had shocked the forex market had the time. The naira was trading a little above N500 to $1 at that period in the black market, but has depreciated by 21.9% since then.
Last year’s decision makes it the second time the central bank will discontinue sale of foreign currency to Bureau De Change operators. The first was in 2016. Emefiele said the BDC operators were mandated to serve those in need of US currency at a range of $5,000 and below, but began to disburse millions of dollars.
“in particular, we have noted with disappointment and great concern that our Bureau De Change operators have abandoned the origin objective for their establishment, which was to serve retail end users who need $5,000 or less. Instead, they have become wholesale dealers, illegally in foreign exchange to the tune of millions of dollars per transaction.” He said.
Emefiele further stated that, “Despite the fact, that Nigeria is the only country in the world today where a central bank sells dollars directly to the Bureau De Change operators in the Nigeria Bureaus De Change segment have not reciprocated the bank’s gesture to help maintain price stability in that market.”
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