Nigerian Central Bank Lifts Restriction On Forex Deposits

 The Central Bank of Nigeria (CBN) says it has discontinued the sale of foreign exchange (forex) to Bureau De Change (BDCs) operators in the country.

The CBN Governor, Mr Godwin Emefiele, announced this at a news conference on Monday in Abuja.

He said that the apex bank's decision was due to the dishonest activities of some of the operators of the BDC such activities as financing of unauthorised transactions with foreign exchange procured from the CBN.

"Whereas the bank has continued to sell U.S. Dollars at about N197 per dollar to these operators, they have in turn become greedy in their sales to ordinary Nigerians, with selling rates of as high as N250 per dollar.

"In view of the above, the Management of the CBN has reached the decision that the Bank will henceforth discontinue its sale of foreign exchange to BDCs.

"Operators in this segment of the market will now need to source their foreign exchange from autonomous sources.

"They must however note that the CBN would deploy more resources to monitor these sources to ensure that no operator is in violation of our anti-money laundering laws," he said.

Emefiele said that the decision was to reduce pressure on the country's foreign reserve.

He explained that making forex available for the BDCs, importation of petroleum products, critical raw materials and school fees, was taking its toll on the nation's reserve.

Emfiele said due to this, the Foreign Exchange Reserves had depleted to 28 billion dollars today from 37.3 billion dollars in June 2014.

"More disturbing, though, is the financial burden being placed on the bank and our limited foreign exchange.

"The CBN sells 60,000 dollars to each BDC per week; this amount translates to 167 million dollars per week and about 8.6 billion dollars per year.

"To curtail this reserve depletion, we have reduced the amount of weekly sales to 10,000 dollars per BDC.

"This translates to 28.4 million dollars depletion of the foreign reserve per week and 1.476 billion dollars per annum.

"This is a huge haemorrhage on our scarce foreign exchange reserves and cannot continue; we are also concerned that BDCs have become a conduit for illicit trade and financial flows," he said.

According to Emefiele, the new policy aims to ensure that the country's financial system remains stable and not intended to inconvenience ordinary Nigerians.

He announced that the apex Bank would now permit commercial banks in the country to begin accepting cash deposits of foreign exchange from their customers.