Central Bank of Nigeria (CBN) has on Tuesday, July 27 announced discontinuation of the sales of forex to Bureau De Change (BDC) operators in the country.
Central Bank also confirmed that they will no longer license new BDC operations in the country and have also halted all current processes for new licenses.
Godwin Emefiele, governor of the apex bank, announced these at the end of the monetary policy committee’s meeting in Abuja on Tuesday.
Emefiele said BDC operators have become a conduit for illegal financial flows working with corrupt people to conduct illicit flows and money laundering in Nigeria.
Weekly sales of foreign exchange by the CBN will henceforth go directly to commercial banks, the CBN governor, Godwin Emefiele, said in a live TV broadcast.
“We are concerned that BDCs have allowed themselves to be used for graft,” Emefiele added.
He said international bodies, including some embassies and donor agencies, have been complicit in illegal forex transactions that have hindered the flow of foreign exchange into the country.
Emefiele expressed that the organisations have chosen to channel forex through the black market than use the official Investors and Exporters (I&E) window, called Nafex.
The Governor noted that the regulator will “deal ruthlessly” with banks allowing illegal forex dealers to use their platforms and will report the defaulting international organisations to their regulators.
We will deal with them ruthlessly and we will report the international bodies.
Accordingly, Emefiele said banks are mandated to “immediately” and transparently sell forex to customers who present the required documents. All banks are to immeidtaely create dedicated tellers for the same purpose.
The announcement comes as the bank intensifies efforts to mitigate further decline of the country’s economy and the national currency.
Bureau de change operators have long been a major black market, providing exchange rate support to those unable to formally access foreign currencies directly from the CBN.
The suspension of their ability to source foreign exchange from the CBN could have a significant impact on the country’s economy and bring naira under further pressure.
The new development as Buhari administration continues to face criticism for mismanaging the country’s economy after the naira tumbled by widespread margin against the United States dollar and other major international currencies.
A dollar was about 180 to naira when the administration assumed power in 2015, but it now exchanges for about 411.50 to naira, and about 510 to naira at parallel markets.
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