Indications have emerged that the Central Bank of Nigeria, CBN, may compel banks to sell foreign currency proceeds of international money transfers to Bureaux De Change, BDCs.
In order to increase the volume of dollar in the market and stabilise the naira, the CBN is likely to begin the enforcement of its directive to that effect soon, The Nation gathered on Sunday, July 31.
In a July 22 circular to the banks, titled: “Sales of foreign currency proceeds of international money transfers to BDCs”, signed by its Acting Director, Trade & Exchange, W.D Gotring, the apex bank said the policy shift was intended to ensure the stability of the exchange rate and boost participation of all critical stakeholders in the foreign exchange (forex) market.
The banks are however yet to comply with the directive nearly two weeks after the circular was issued.
The naira closed on Friday at N375 to the dollar in the parallel market, and exchanged at N330 to dollar in the official market. The local currency has lost over 35 per cent of its value against the dollar since January.
In January, 2015, the CBN stopped all forms of forex sales to BDCs, accusing them of round tripping and frustrating the policies meant to stabilise the naira. But despite the stoppage of dollar sales to BDCs, the naira has continued to depreciate.
An industry source told The Nation that the CBN is already talking with the banks and international money transfer agents like Western Union and MoneyGram to see that at least 50 per cent of the $21 billion Diaspora remittances targeted in the policy is channelled through the BDCs.
Although the banks and money transfer agents are averse to implementing the policy, the CBN is pushing to see that BDCs are integrated into the dollar flow mechanisms that would boost liquidity and expand the forex playing field.
“Both the banks and money transfer companies are worried over the CBN moves because selling dollar to BDCs means that the volume of dollar they transact with will be drastically reduced,” the source said.
The volume of funds coming from the Diaspora remittances is expected to hit $35 billion yearly, following the tactical devaluation of the naira, which remains an incentive for more dollar inflows to the economy.