*Halts further processing of BDCs’ applications for FOREX, new licences
*FOREX sale now to be conducted by banks
*Retains interest rate at 11.5%
James Emejo in Abuja
Citing various regulatory infractions and other unwholesome practices, the Central Bank of Nigeria (CBN) Tuesday said it will henceforth discontinue the sale of forex to Bureau De Change operators (BDCs) in the country.
The CBN Governor, Mr. Godwin Emefiele, after the two-day meeting of the Monetary Policy Committee (MPC) in Abuja, further directed all commercial banks to with immediate effect, create designated branches for the sale and disposal of FOREX to customers who deserve it for legitimate purposes.
The apex bank added that commercial banks were now permitted to begin to accept cash deposits of foreign exchange from their customers.
Emefiele said the CBN will no longer process or issue new licences for BDC operations in the country, adding that all licences being currently processed regardless of the stage of processing have been suspended.
He said the CBN will now channel weekly allocations currently meant for BDCs to commercial banks.
The CBN boss however, explained that these measures were to ensure the apex bank was better able to carry out its mandate in an effective and efficient manner which guarantees preservation of the shared commonwealth and the hard earned financial system stability for the benefit of Nigerians.
The CBN also expressed concerns about the broad level of insecurity across the country, noting its impact on business confidence and overall economic activities.
The bank highlighted the persistent insecurity in key commodity producing areas and urged the federal government to intensify security surveillance in farming communities to ensure uninterrupted farming activities.
The move against BDCs came on a day the apex financial system regulator, also resolved to retain Monetary Policy Rate (MPR), otherwise known as interest rate, at 11.5 per cent and the asymmetric corridor of +100/-700 basis points around the MPR.
The apex bank also left the Cash Reserve Ratio at 27.5 per cent and Liquidity Ratio at 30 per cent.
The MPR is the rate at which the CBN lends to commercial banks and often determines the cost of borrowing in the economy.
Emefiele, who read the committee’s communique, explained that the decision to hold all the monetary policy tools constant was borne out of the need to stimulate the growth of the economy.
However, Emefiele said the decision to edge out the BDC operators was necessitated by their dubious and unwholesome practices adding that the operators had gone beyond their primary role of being retail dealers of forex to wholesale dealers.
The CBN governor stated that rather than catering for the retail users who required about $5,000 to meet their FX needs, BDCs transacted in millions of dollars.
Details.later…
