Thursday, August 17, 2017 7:03:21 AM- Nigerian Stock Exchange.



  CBN slashes Dollar sales to BDC's, issues new guidelines

      

Jan 5 (Lagos) - Central Bank of Nigeria will sell only $ 10,000 to each of its 2839 registered Bureaux De Change (BDC's) tomorrow.



Also, the CBN has issued new guidelines for the operation of BDCs which pegged the minimum capital base and cautionary deposits for intending operators at N 70 million.



The guideline, which is in line with the exercise of the powers conferred on it by the Central Bank of Nigeria Act of 2007 and the Banks and Other Financial Institutions Act 2004 (BOFIA), also stipulates a non-refundable application fee of N100,000 and non-refundable licensing fee of N1 million.



The circular, which took effect on January 1, orders retail money exchanges to deposit a mandatory cautionary deposit of N35 million in an account with the CBN, in addition to a minimum capital requirement of N35 million.



The Naira is trading at 265 in the parallel markets while trading at 197 officially. It is trading at 199.05 in the inter-bank window but it is the parallel market (black market) which is worrying investors and businesses in Nigeria. 



This new 10,000 limit on BDC's could push this parallel rate even higher if demand for Dollars increases which is something that normally happens, especially if you reduce the supply by such a big margin.



We should expect a sharp fall in the Naira in the parallel markets by next week and an official devaluation within 3 months. 



Naira was officially devalued in February of 2015 but the devaluation did not stop the free fall of the Naira in the parallel markets.






reporting for easykobo.com on Tuesday, January 5 2016 from Lagos, Nigeria
 



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