CBN FX Sales ban to BDCs:financial and market players react

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Tuesday, January 12th, 2016 1.00pm/

Yesterday the Central Bank Governor Mr Godwin Emefiele in a press conference on its monetary policy direction, announced that “The Bank would henceforth discontinue its sales of foreign exchange to Bureau De Changes. Operators in this segment of the market would now need to source their foreign exchange from autonomous source. They must however note that the CBN would deploy more resources to monitoring these sources to ensure that no operator is in violation of our anti-money laundering laws”.

This decision has been greeted with mixed reactions from stakeholders in the economic and financial community of the nation, viewed as part of the measures by the Apex bank to carry out forex management for the country.

Cerebral economist and financial analyst Mr Bismark Rewane CEO of Financial Derivatives, asserted that the CBN action, signalled a new season for Nigerians to adjust to the economic realities, that is prevailent at the moment.

Mr Rewane noted that the FX sales ban to BDCs was a reflection  of the economic status of Nigeria, characterized by low oil price, low oil revenues and the fact that something must give up.

The renowned financial anaylst further stated that this period was a moment for Nigerians to make tough and hard decisions.

Rewane posited that Nigerians will have to determine what they can afford, as the crude oil price races below $35, the first time in 11 years.

Giving a market perspective, Mr Charles Fakroghah of the Foresight Securities & Investments called on the monetary authorities to come out with a clear agenda, objective & expected outcome on the forex management.

Fakrogha raised fears that the current decision of the CBN, will hike the demand for dollars and other foreign currencies, while it will negatively impact the stock market, as it fuel skepticism for investors who will be extremely cautious.

He urged the CBN to go back to the drawing board, and articulate a concise policy framework and roadmap for its forex management strategies.

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