CBN’s new FX policy sinks the Naira at N525/$1

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The decision of the Central Bank of Nigeria (CBN) to stop the weekly sale of foreign exchange (FX) to Bureau de Change operations has taken a heavy toll on the value of the local currency as it plummets to N525 to a dollar at the parallel market.

The local currency, which opened today’s trading at N505/$1, lost N20 or 3.9 per cent, according to data on abokiFX.com, a website that collates parallel rates in Lagos.

At the importer & exporter (I&E) window, it traded moderately to close at N411.60 per dollar.

On Tuesday, Godwin Emefiele, governor of CBN, announced the discontinuation of forex sales to BDCs.

The CBN governor said BDC operators have become agents of money laundering in Nigeria.

He said the CBN would channel weekly allocations of dollar sales to commercial banks to meet legitimate FX demands and mandated banks to sell forex to every customer who meets requirements.

Market insiders however expressed fears that the CBN may be unable to meet requests of banks to serve all customers as mandated.

The source added that the apex bank allocates about $20,000 weekly to each BDC operator in the country – amounting to $5.72 billion yearly to the parallel market.

“Commercial banks come with bids of $1.3 billion fortnightly, and CBN cannot provide more than $250 million,” the source had said.

The latest development is also coming amid plunging external reserves and diaspora remittances.

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