CBN Suspends Sales of Forex to Bureau De Changes

• CBN Suspends Sales of Forex to Bureau De Changes

The Central Bank of Nigeria (CBN) on Thursday announced it has suspended sales of the forex to the Bureau De Change Operators in the country despite adjusting rates about two weeks ago.

This was contained in a letter dated March 25, 2020, to the Association of Bureau De Change Operators of Nigeria (ABCON).

The apex bank had said it remains operational during this tough period as it has triggered plans to ensure operations remain largely undisrupted despite the current situation.

“As a responsible public institution and regulator, we have triggered our business continuity plans to ensure that the Bank’s operations remain largely undisrupted at this present time when social distancing has become key to checking further spread of the virus. We have also directed Deposit Money Banks (DMBs) and other financial institutions to do same,” the apex bank stated in a statement released on March 25, 2020.

“The welfare and safety of our staff and their families, and indeed all Nigerians, remain top priority to us. Consequently, with effect from Wednesday, March 25, 2020, till further notice, only essential staff of the CBN Head Office and the 37 Branches of the Bank will be expected to report for duty daily. In other words, our staff in non-critical roles have been directed to stay at home and work remotely, when their services are required.”

Therefore, it was shocking that the apex bank would be cutting off supply to the Bureau De Change Operators in a move that could escalate the nation’s current economic situation and push the foreign exchange rate of the local currency to over N515/$1 as already being traded in London FX forward market.

A quick look at Nigeria’s foreign reserves shows, in the last 10 days, the nation’s foreign reserves declined from $36.018 billion recorded on March 17, 2020, to $35.710 billion on March 24, 2020. Suggesting that the decision may not be unconnected with the falling foreign reserves and the apex bank’s inability to sustain its forex intervention program as oil prices remain below $30 a barrel.