CBN Stops FX Sales by Banks to BDCs; Banks Await Circular

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Friday, October 14, 2016/ 8.18am /News 

In a follow-up to the news which emerged in the dailies yesterday that “CBN suspends 19 banks from forex sale to to BDCs”. Indication have emerged that the new direction by the CBN is not a suspension per se rather a change in the channel through which CBN will like to stimulate foreign currency liquidity to the parallel market.

The new directive has no implications for the FX businesses of the bank they continue to lead remittances to Nigeria from the Diasporas working with the IMTOs which are done in compliance with the extant CBN regulations.  

This requires onward sales of a percentage of such FX inflows to the CBN and the balance to banks’ customers.  

Furthermore, it was explained in another view that the CBN Stopped the selling of FX from IMTS to BDCs in order to boost the liquidity positions of the CBN and as such not a sanction on the affected banks while the directive is also not expected to have any negative impact on them. 

It will be recalled that we updated the market a few weeks back about FX scarcity in the parallel market due to high demand of the foreign currency. As banks/stakeholders await an official circular on the stop of FX sales, it is expected that the circular with come in with a new way through which FX will be channeled to the BDC segment of the forex market.  

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