A new report has indicated that the Central Bank of Nigeria (CBN) may have finally stopped funding Bureau de Change Operators (BDCs).
The report, which emerged recently, states that the apex bank wants to further liberalize the FX market by testing its reform template and minimize quick fixes by applying mechanical approaches to institutional processes in FX market management.
It said that the CBN is currently reviewing significant policies to strengthen the implementation or tweak its reforms.
The policy reportedly aims to unlock FX liquidity in the medium to long term and build confidence in the Nigerian FX market.
The Guardian reports that the CBN governor, Olayemi Cardoso, has continued with the FX reforms handed down by the erstwhile Acting Governor, Folashodun Shonubi, to prevent the negative consequences of policy reversal.
In May 2024, the financial institutions regulator issued new regulatory guidelines for BDC operations, revoking existing licenses and asking the operators to reapply.
The new regime became effective June 3, with existing and new licenses having six months grace.Â
The CBN guidelines did not explicitly support BDCs but listed funding sources such as the Nigerian Foreign Exchange Market (NFEM), international money transfer operators (IMTOs), and diplomatic missions in Nigeria if some requirements are met.
The BDCs have often written to the CBN on the way forward but have not responded.
The Guardian report said that Aminu Gwadabe, president of the Association of Bureau de Change Operators of Nigeria (ABCON), disclosed that the last correspondence with CBN was delivered a month ago.
The apex bank commenced forex sales to the BDC operators in March and April this year, leading to the naira rapidly appreciating against the dollar and emerging as the worldâs best-performing currency.
Analysts believe the FX sales to BDCs boosted market liquidity and brought the official and parallel FX markets close to par.
Oluwaseun Ogedengbe, a forex trader, disclosed that the $10,000 weekly FX sales to BDCs were very helpful and lifted the pressure on the naira.
Data from the FMDQ Exchange shows that the naira lost N2 to the dollar on Friday, June 21, 2024, to trade N1,485 per dollar.
TimesNow.com.ng earlier reported that the Kenyan shilling currency has risen to a 15-month high against the US dollar.
The last time the shilling performed this strong was in March last year, rising from Shs161 per dollar to Shs 128.66 to remain one of the best-performing currencies in Africa.
Reports show that the performance is due to improved agricultural export inflows as dollar demand thaws among importers.
Source: TimesNow.com.ng
