CBN forex sales to banks down, despite ban on BD
By Jeph Ajobaju, Chief Copy Editor
Sale of foreign exchange (forex) by the Central Bank of Nigeria (CBN) to commercial banks, the authorised dealers, declined to $1.65 billion in August 2021 from $2.05 billion in July 2021, as gleaned from latest CBN data.
The CBN directed commercial banks last August to publish the names and Bank Verification Numbers (BVNs) of customers who presented fake travel documents to purchase Business Travel Allowance (BTA) or Personal Travel Allowance (PTA).
The move is part of efforts to check corruption in the system.
“The Bank continued to intervene in the foreign exchange market to ensure systemic stability and adequate liquidity.
“Total foreign exchange sales to authorised dealers by the Bank was US$1.65 billion in August, representing a decrease of 19.3 per cent relative to US$2.05 billion in July,” the CBN said in its report, per Nairametrics.
Forex sales to interbank rose 63.5 per cent to $0.28 billion, Swap transactions 72.3 per cent to $0.46 billion, and SME interventions 42.5 per cent to $0.17 billion.
The CBN explained that its “interventions at the Secondary Market Intervention Sales (SMIS) and Investors’ and Exporters’ (I&E) fell 33.8 per cent and 14.7 per cent to US$0.52 billion and US$0.23 billion, respectively, compared with the levels in the previous month.”
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Stoppage of forex sale to BDCs
CBN Governor Godwin Emefele had at the end of the Monetary Policy Committee (MPC) meeting last July announced the stoppage of forex sale to bureau de change (BDC) operators.
He said the new policy, which has been met with scepticism by the volatile forex market, will not award new licences to BDCs and the CBN will only sell forex to commercial bank for resale to the general public.
The CBN directed all banks to set up teller points at designated branches across the country to fulfil legitimate forex requests for BTA, PTA, tuition fees, medical payments and SMEs transactions to facilitate implementation of the new policy.
The CBN sold $20,000 each to over 5,500 BDC operators per week before it stopped direct allocation to them.
This translated to about $110 million per week and about $5.72 billion per year.
