The Central Bank of Nigeria (CBN) on Tuesday announced that it had stopped the sale of foreign exchange (FX) to Bureau De Change (BDCs) operators in the country.
CBN governor, Godwin Emefiele, made the announcement at the end of the monetary policy committee meeting in Abuja.
He accused the BDC operators of making efforts to dollarise the Nigerian economy, saying the apex bank receives about 5,000 applications every month for BDC registration.
Emefiele said BDC operators have become a conduit for illegal financial flows working with corrupt people to conduct money laundering in Nigeria.
“They have turned themselves away from their objectives,” he said. They are now agents that facilitate graft and corruption in the country. We cannot continue with the bad practices that are happening at the BDC market,” he said.
The apex bank governor added that there is evidence of prevailing ownership of several BDCs by the same promoters to procure multiple FX from the central bank.
“Several international organisations, embassies patronise BDC through illegal forex dealers to fund their institutions. We will deal ruthlessly with Nigerian banks that deal with illegal BDCs and we will report foreign organisations patronising them.”
He said the CBN will henceforth channel weekly allocations of dollar sales to commercial banks to meet legitimate FX demands and also mandated banks to sell forex to every customer.
Meanwhile, the bank also announced its decision to retain the monetary policy rate (MPR) at 11.5 percent.
At its last meeting, the committee members had voted to retain MPR at 11.5 per cent – the rate it had been since September 2020.
Emefiele said “The MPC made the decision to hold all policy parameters constant. Committee thus decided by a unanimous vote to retain the monetary policy rate at 11.5%.”
“MPC voted to retain an asymmetric corridor +100 -700 basis points. It also voted to retain cash reserve ratio at 27.5% and retain liquidity ratio at 30%,” he said.
The action of the CBN monetary policy committee is in line with IMF’s recommendation in its latest World Economic Outlook (WEO) released on Tuesday, wherein it advised central banks to look through transitory inflation pressures and avoid tightening until there is more clarity on underlying price dynamics.
“Clear communication from central banks on the outlook for monetary policy will be key to shaping inflation expectations and safeguarding against premature tightening of financial conditions,” IMF said.
The Washington-based institution projected growth of 2.5 per cent for Nigeria in 2021 on the slow rollout of vaccines.
