CBN to Stop the Sale of FX to BDC with Immediate Effect 27/07/2021


Information is reaching us that CBN has recently resolved to stop the sale of FX to BDC with immediate effect. CBN also stops issuance of new licenses to BDCs.

The CBN Governor, Godwin Emefiele, made the announcement while reading the resolutions after the 2-day Monetary Policy Committee (MPC) meeting today Tuesday, July 27, 2021.

Henceforth, the apex bank will now sell forex to banks only and will put policies in-place to make sure that it is rightly used, according to the communique.

Below are the highlights from the communique;

“a) The Bank would henceforth discontinue its sales of foreign exchange to BDCs. 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;

b)The Bank would now permit commercial banks in the country begin accepting cash deposits of foreign exchange from their customers.”

Emefiele said BDC operators have become a conduit for illegal financial flows working with corrupt people to conduct money laundering in Nigeria, especially now that the bank has found that many BDCs are linked to same owners.

He explained that the CBN receives about 574 license applications from BDCs every month saying that there are currently 5,500 licensed BDC operators across the country. Hence, they are surplus to the requirements.

Industry watchers posit that this new policy could imply a spike in the fx price in the parallel market, if it still manages to exist.

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