CBN Launches New Forex Rates for Invisibles, BDCs

CBN BuildingHello Reader,

Following difficulties encountered sourcing foreign exchange for invisibles (BTA, medicals, school fees) among others, The Central Bank of Nigeria (CBN) on Monday declared that Nigerians can at the moment, buy dollar at N360 from commercial banks across the country.

Accordingly, in chains of statements posted on its twitter account, (@cenbank) the apex bank declared as follows:

1) “CBN to sell FOREX to banks at N357/$1, while banks will sell to their customers at N360/$1 for invisibles (BTA, medicals, fees, etc).   (2)  “CBN directs banks to post new rates in the banking halls of their branches immediately.” (3) “CBN examiners to visit banks to ensure the new rates are implemented.”  (4) CBN prohibits banks from selling FOREX funds meant for invisibles to BDCs.”

In another development, the apex bank of Nigeria made a downward review of the rate it was selling dollars to the operators of Bureau De Change, nationwide. In a statement in Lagos on Tuesday, the President, Association of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwadabe, confirmed to the News Agency of Nigeria that the buying rate for BDCs would now be N350 and would sell at N360 to the dollar. According to the BDC boss, prior to this time, BDCs were buying dollars from the CBN at a forward rate of N381 to the dollar and selling at N399 to the dollar. Gwadabe therefore lauded the CBN for paying attention to the appeal of BDCs for a level playing ground for all players in the foreign exchange market. The ABCON boss also assured of the commitment of all BDCs in partnering with the Central bank to maintain the gains attained by the naira against the dollar.

It will be recalled that the CBN has pumped close to two billion dollars to the foreign exchange market in the last five weeks of its intervention, in a bid to check the speculative activities of forex dealers in the market and to ensure that genuine foreign exchange seekers have access to foreign currencies with ease.

As expected, the various interventions from the apex bank have seen the dollar rates crash at the parallel market to about N375/$1 in Lagos and N365/$1 in Abuja. Meanwhile, feelers from the streets indicate that although it is early to judge, no effect has been recorded on prices of goods in the market for instance:

Boye, a consumer said, “People that were quick to increase prices due to dollar hike are now sluggish to journey along with the dollar, not wanting to go back to prices before the dollar hike. Again the banks have not been displaying the official forex rates since many months, so no one knows the exact rates of forex, God dey ooo!

Friday O. a commercial driver said: This is one thing with our traders, once they jack up prices, they don’t like bringing them down because no one is forcing them, and everyone is on his/her own.

Bello, a worker said, very good news, but will the prices of rice, garri, red oil, vegetable oil, tinned tomatoes, pure (sachet) water, toilet roll, fuel and transport fare ever come down? How does this affect the man on the street? Government should please help us, not only BTA, Medical and school fees. We that are not travelling abroad should buy food items cheap in order to survive!

From our end, we thank the CBN for the various interventions, even as we expect good monitoring of the banks, BDCs and all stakeholders in the forex chain, so the stress of Nigerians and those who have genuine need of the forex can be reduced, whilst we also encourage the commodities/price control agencies to step up their duties to ensure prices of food items are sold at controlled or acceptable prices. The time to think and act is now; these are life and business essentials, so let’s keep thinking clearly!

Your suggestions, comments or contributions are highly appreciated.

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CBN Launches New Forex Rates for Invisibles, BDCs

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