- Announces Provisions for School Fees, SMEs
Dollar scarcity that has characterized the foreign exchange (forex) market will respond to liquidity stream in the week following the decision of the Central Bank of Nigeria (CBN) to resume forex sales to Bureau De Change (BDC) operators.
The apex bank had Thursday announced that the gradual sale of foreign exchange (forex) to licensed Bureau De Change (BDC) operators would resume from Monday, about five months after it was stopped on March 27 as the country faced an imminent lockdown to curb the effects of the Coronavirus pandemic
The CBN, in a circular dated August 27, signed by its Director, Trade and Exchange Department, Dr. Ozoemena Nnaji, and addressed to all authorised dealers, BDC operators and members of the public, the apex bank said the resumption of forex sales was part of efforts to enhance accessibility of dollar particularly to travellers following the announcement of the limited resumption of international flights.
Nigerian Civil Aviation Authority (NCAA) Thursday said the resumption of international flights, earlier fixed for Saturday, had been shifted to September 5.
The CBN also announced the resumption of dollar sales for school fees and SMEs wishing to make essential imports needed to revamp economic activities across the country.
In a circular entitled “CBN Resumes Dollar Sales For SMEs, School Fees”, dated August 29, and signed by its Director, Corporate Communications, Isaac Okorafor, the CBN announced that the move was in response to gradual easing of the COVID-19 lockdown both globally and in Nigeria.
“In view of the gradual easing of the COVID-19 lockdown both globally and in Nigeria, the Central Bank of Nigeria (CBN) has resumed provision of foreign exchange to all commercial banks for onward sales to parents wishing to pay schools fees and SMEs wishing to make essential imports needed to revamp economic activities across the country.
“In particular, the CBN is resuming the provision of over US$100 million per week for both categories.
“The CBN has also made complete arrangements to resume foreign exchange sales to the BDC segment of the market for business travels, personal travels, and other designated retail uses, as soon as international flights resume.
“With these actions, the CBN wishes to reiterate that it is adequately meeting the needs of all legitimate users, and our continued capacity to do so should not be in doubt.
“There is therefore no need for panic by any end-user that could necessitate recourse to illegitimate sources and spike in foreign exchange rates.
“Given this, the Bank has ramped up its surveillance of the foreign exchange markets for speculators, smugglers and other illegal users, and will take decisive actions against anyone/institutions involved in such nefarious activities.”
Reacting to the developments, the president, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, said resumption of dollar sales to BDCs would have positive impact on liquidity in the market.
It will also gradually achieve the much desired single-window forex market as against the multi-window system that creates avenues for abuse through arbitrage and other corrupt practices.
In an exclusive chat with NEXTMONEY, Gwadabe said the BDCs had always prove n to be potent monetary tool instrument of the CBN exchange rate stability management and deserve to be given the due recognition the country’s monetary policy matters.
“The announcement so far has seen Naira rebound in the market as the rates in the open market crashed to N470/$ from N477/$.
“We expect to see further Naira rebounds as BDCs resume Tik tok in the coming week,” he said.