Money changers: FG moves to shrink ‘black market’

IN order to force a favourable exchange rate for the Naira, the Nigerian government has started obstructing the unofficial market through a clampdown on street money changers.

Explaining why Dozens of money changers have since Wednesday been arrested by officials of the State Security Service (SSS), in Lagos and Abuja, the duo of Mr Isaac Okoroafor, Acting Director of Corporate Communication and Dr Alvan Ikoku, Director, Trade & Exchange Department, both of the Central Bank of Nigeria(CBN), said  it is not CBN that is directly carrying out the raids, but the bank is  aware that the DSS is raiding places where miscreants are parading as Bureau De Change (BDC) owners.

“They are NOT raiding licensed BDCs,” Okoroafor told Nigerian Tribune in telephone conversation.

Similarly, while some market watchers believed the move can only reduce the number of street (black market) traders, but cannot eliminate them that segment totally, Ikoku in a TV programme monitored in Lagos over the weekend said though the exercise is really an enforcement of the rule, the apex bank is not aware of any arrests conducted in the offices of BDC operators for not obeying the rules.

“The hawkers of foreign exchange are breaking the law and we only trying to enforce the law. Bureau De Change operators are co-operating with CBN. It is the street hawkers that we are after. We are only enforcing the rules by sending law enforcement agents after these people. “They are not registered and they need to apply for licences from the CBN,” Ikoku said.

The Central Bank allocates dollars to licensed money changers through Travelex at about N381 per dollar, to enable them sell to end users at about N385 per dollar.

As part of the guidelines, the Central Bank directed the operators not to sell foreign exchange above two per cent margin of the buying rate.

However, there have been reports that some money changers, particularly those unregistered, have been engaging in some illegal activities considered to be undermining the foreign exchange policy.

Asked what will happens to the approved rate in a situation where market forces pushes the Naira/Dollar exchange rate to N480/$ or N500/$, clarified that BDCs are licensed and are expected to sell at approved rates.

However, if that happens, the director said the BDCs through their association will be asked to keep to the rules until such market changes are renegotiated.

The arrests, Nigerian Tribune learnt, commenced after a meeting between the SSS, CBN, and leaders of the Bureau De Change in Abuja last week.

At the meeting, held in Abuja, the officials agreed that sharp practices by Bureau De Change operators was a major factor responsible for the value of the Nigerian currency which has gone as high as N480 to a dollar at the black market and the parallel market despite selling below N400 at the official market.

“The meeting agreed to force the bureau de change to buy from willing sellers at N390 or lower and sell to willing buyers at N400 or below,” an official briefed on the agreements said.

The Naira value was arrived at after considerations of recent actions by the Central Bank to stabilise the currency.