UPDATE: CBN bans sales of forex to BDCs, issuance of new licenses

The Central Bank of Nigeria (CBN) has said it will no longer sell Foreign Exchange (Forex) to Bureau De Change (BDC) operators.

Instead, the regulator said it will sell more dollars and other foreign currencies directly to commercial banks, which have been mandated to sell to Nigerians.

The bank said it will also no longer process applications for BDC licences in the country.

The CBN in the same vein accused the parallel market of being a conduit for illicit forex flows and graft.
Weekly sales of foreign exchange by the CBN will henceforth go directly to commercial banks, the CBN governor,

Godwin Emefiele said in a live TV broadcast monitored in Lagos on Tuesday after announcing that the bank has retained its benchmark policy rate.

“We are concerned that BDCs have allowed themselves to be used for the graft,” Mr Emefiele said.

He said international bodies, including some embassies and donor agencies, have been complicit in illegal forex transactions that have hindered the flow of foreign exchange into the country.

According to him, the organisations have chosen to channel forex through the black market than use the official Investors and Exporters (I&E) window, called Nafex.

Mr Emefiele said the regulator will “deal ruthlessly” with banks allowing illegal forex dealers to use their platforms and will report the defaulting international organisations to their regulators.

“We will deal with them ruthlessly and we will report the international bodies,” he said.

Accordingly, Mr Emefiele said banks are mandated to “immediately” and transparently sell forex to customers who present the required documents. All banks are to immediately create dedicated tellers for the same purpose.

Customers not attended to by the banks are to report to the CBN through a toll-free number: 0700 22 55 226 or email: cbd@cbn.gov.ng.

“This measure is not punitive on anyone, but it is to ensure the CBN is able to carry out its legitimate mandate of serving all Nigerians,” Mr Emefiele said.

This latest ban is coming barely a year after it resumed sales of forex to the sector.

The Central Bank had last year announced the resumption of the sale of forex to Bureau De Change starting August 31, 2020.

This was revealed in a circular to all authorised dealers, BDCs, and general public titled Resumption of Sales to Bureau De Change operators and signed by CBN Director of Trade and Exchange Department, Dr O.S Nnaji.

The apex bank revealed the decision to commence forex sales was on the back of the limited resumption of international travel in the country.

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