Ban on BDC benefits banks and official paper trail
By Jeph Ajobaju, Chief Copy Editor
Banks are seeing more demand for foreign exchange (forex) sequel to the ban on bureaux du change (BDCs) by the Central Bank of Nigeria (CBN) in its bid to rein in abuses in the quest for dollars which underpins nearly all international deals.
CBN Deputy Governor (Corporate Services) Adamu Lametek, who disclosed this, said the naira exchange rate has remained stable since the last adjustment at the I&E window, despite tight liquidity and a recent change in the forex management.
Banks have, however, warned that customers who fail to comply with the new orex policy may face criminal prosecution by the CBN..
They sent emails to their customers warning that defaulters may face fines, including being prevented from accessing forex from the official forex market, bank account restrictions, and criminal prosecution.
Guaranty Trust Bank, United Bank for Africa, Zenith Bank, Stanbic IBTC, and First Bank were among banks that sent such emails to their customers in August last year, reported by The PUNCH.
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Halt in naira depreciation
Adamu confirmed that the rapid depreciation of the naira in the black market has been halted.
“The initial panic-driven depreciation at the parallel market has gradually given way to real market forces,” he said in a statement, per PREMIMUM TIMES.
“Apparently, the revised FX management strategy, which excludes BDCs from direct sales, is working as a substantial share of FX demand has migrated to the DMB’s window.
“We should expect this pattern to continue in the coming months as confidence in the modified framework grows.”
“Overall, I figured out that the primary purpose of the policy at this point would be to preserve and possibly deepen the relative stability the economy has started to record. The current monetary policy configuration continues to be relevant in my view.”
Adamu said despite the positive result so far in inflation and growth, the economy is yet to attain pre-pandemic levels on several fronts.
Employment, for instance, continues to be a major policy concern, he added.