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More trouble for BDC operators as dollar crashes to N1,130

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These are not the best of times for Bureau de Change operators in Nigeria who are now counting losses after the naira gained N770 between February 21 and April 9, 2024.

According to sources who are in the know of developments in the foreign exchange market, at the BDC segment of the Nigerian Foreign Exchange Market, the naira was trading at N1,130 as of April 9, 2024, from N1,235, which it sold on April 8.

Some sellers in Zone 4, Abuja, who spoke to newsmen, said they lost millions of naira after purchasing dollars at N1900.

The naira made a surprise recovery after trading as high as N1900 per dollar on February 21, 2024, when the apex bank began a clampdown on street trading by BDCs.

The Central Bank of Nigeria (CBN) took its fight against speculating on the naira by raising the capital requirements of ‘Tier 1 BDC’ to N2bn and ‘Tier 2 BDC’ capital pegged at N500m.

The bank also resumed the sale of dollars to qualified operators.
In a circular dated February 27, 2024, with reference number TED/DIR/CON/GOM/001/066, signed by CBN’s Director, Trade & Exchange Department, Dr Hassan Mahmud the CBN.

The apex bank also banned beneficiaries from selling above one per cent of the purchase price.

The naira began a gradual recovery when the CBN withdrew the operating licences of 4,173 Bureaux De Change operators over failure to make rendition of returns in line with the Guidelines as well as failure to comply with guidelines, directives and circulars of the CBN, particularly Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT)and Counter-Proliferation Financing (CPF) regulations.

The CBN further crashed the price with another circular referenced TED/DIR/CON/GOM/001/072, saying it would be selling $10,000 to qualified BDC operators at the rate of N1,251 per dollar.

The BDCs were prohibited from selling the dollar for more than 1.5 per cent of the purchase price.

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