The Central Bank of Nigeria, CBN, has defended its new policy mandating BDCs’ to access the forex window of the bank at least thrice weekly, for the purchase of its foreign exchange, adding that it is aimed at checking scarcity.
In a warning the apex bank issued through its Acting Director Communications, Mr. Isaac Okorafor, CBN cautions that failing to comply will attract stiff penalties and may lead to revocation of licences.
This is coming even as the BDCs’ reacted to the bank’s policy statement on Saturday, saying that the new directive is detrimental to the continued existence of the unit.
Explaining the reason for the decision, Okorafor pointed out that the CBN chose this course of action after it was discovered that some banks were hoarding the forex from travellers thereby causing unnecessary scarcity.
He stated, ‘’Therefore, to stop this practise, the CBN will from this week and periodically undertake unannounced spot check to ensure compliance’’.
Adding a stern warning, Okorafor said, ‘’Any bank or BDC that is found making any effort to frustrate the stability in the forex market would be dealt with.’’ He also assured that CBN is liquid and stands ready to defend the naira.
But in a swift reaction, President of the Association of Bureaux De Change Operators of Nigeria, ABCON, Aminu Gwadabe, said the directive is not acceptable.
“The CBN’s directive at this time of our operational difficulties is no doubt precarious and vague and was intended to emasculate a sector that has helped the system to stabilize and thus unacceptable,” he said.
“The BDCs buy dollar from the International Money Transfer Operators (IMTOs) at N360/$1 and sell to end users at N361.5/$1 while the CBN sells to commercial banks at N357/$1 and the banks sell to end users at N360/$1,” he said.
Gwadabe said BDCs are heavily regulated despite being a small unit of the financial sector and urged the CBN to review BDC rate to align with that of the banks since both sectors serve the same customers.