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CBN resumes $100m weekly sales for SMEs, school fees

... concludes plans to resume sales to BDCs

…Naira weakens further across markets

The Central Bank of Nigeria (CBN) on Wednesday said it had resumed $100 million weekly sales for school fees and Small and Medium Enterprises (SMEs).

The CBN has also made complete arrangements to resume foreign exchange sales to the BDC segment of the market for business travels, personal travels, and other designated retail uses, as soon as international flights resume.

The regulator on March 26, suspended foreign exchange sales to the Bureau De Change (BDC) operators until further notice due to the Covid-19 lockdown as requested by the operators. The suspension notwithstanding, some BDCs are still active in the market.

This is in view of the gradual easing of the COVID-19 lockdown both globally and in Nigeria.

A statement signed by Isaac Okorafor, director, corporate communications department, reads “Central Bank of Nigeria (CBN) has resumed provision of foreign exchange to all commercial banks for onward sales to parents wishing to pay schools fees and SMEs wishing to make essential imports needed to revamp economic activities across the country. In particular, the CBN is resuming the provision of over US$100 million per week for both categories”.

With these actions, the CBN reiterated that it is adequately meeting the needs of all legitimate users, and its continued capacity to do so should not be in doubt.

There is therefore no need for panic by any end-user that could necessitate recourse to illegitimate sources and spike in foreign exchange rates, the CBN said.

Given this, the Bank has ramped up its surveillance of the foreign exchange markets for speculators, smugglers and other illegal users, and will take decisive actions against anyone/institutions involved in such nefarious activities.

Reacting to CBN’ action, Aminu Gwadabe, president of Association of Bureau De Change Operators of Nigeria (ABCON) said, “Yes, it is in line as our product is cash not digital currency and our clients are travellers. In line with our scope, we engage mostly personal travelling allowance and Buisiness travelling allowance which in all scenarios demand ticket visas of our customers”.

The Naira weakened further by N5.00k as one dollar traded at N460 at the close of business on Wednesday compared with N455 traded in the morning at the black market.

The local currency lost N0.20k at the close of business as the dollar traded at N386.45k on Wednesday as against N386.25k on Tuesday at the Investors and Exporters (I&E) forex window, data from FMDQ indicated.

Naira depreciated by N2 at the retail bureaus as the dollar was trading at N467 on Wednesday from N465 quoted on Tuesday.

Gwadabe said the assurances of the apex bank and the partial return of operations in the foreign exchange market will  ensure sanity and discourage frivolous demand and panic buying which pervades the market in recent times.

He said the BDCs will return as soon as lockdown in the international airport are relaxed.

UAE and China have relaxed their lockdown on international; Nigeria is expected to follow suit after expiry of  the two weeks lockdown on the nation’s boarders.

The return of the BDCs will be the iceberg for complete returns to sanity and devoid of hoarding and speculation, he said.

“I therefore want our members and the General public not to engage on panic buying as anytime soon fingers might be burnt from such behaviours,” Gwadabe said.

 

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