ABCON condemns CBN’s latest policy

By Joshua Amaugo January 12, 2016 11:29

ABCON condemns CBN’s latest policy

Nigerians breathed a sigh of relief as the Central Bank of Nigeria, CBN, on Monday bowed to pressure by lifting its ban prohibiting Deposit Money Banks, DMBs, from accepting foreign exchange deposits directly from customers. However, the President, Association of Bureaux De Change Operators of Nigeria, ABCON, had described the action as the worst ever.

Commercial banks had rejected cash deposits in foreign currencies into domiciliary accounts due to the fact that the level of forex they had in their vaults was exceeding the optimum level that they could manage.

See: Forex Policy: CBN finally bows to pressure

The rejection made many Business men and manufacturing companies to source for forex from BDCs who were alleged to have used the medium to amass wealth as the wide margin between the official window and the parallel market further compounded woes on the naira as it exchange as high as N280 to the dollar.

See: CBN’s forex policy causes more hardship on the economy

The CBN governor, Godwin Emefiele while announcing the suspension of the policy said “The bank (CBN) 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.”

The Chief Executive Officer, SABIL Bureau De Change Limited, Aminu Gwadabe, who doubles as the President, Association of Bureaux De Change Operators expressed displeasure over the CBN’s directive, stating that the policy would only cause crisis in the financial sector.

“There is fire on the mountain. The CBN has done its worst. We’re all running, chasing an elusive dollar. We have travelled that road before and knew it will only worsen the bad situation we are facing today.”

Managing Director, E.M Consolidated Investment Limited, Emeka Moses, also decrying the outright suspension of forex allocations to BDCs said, “Let’s wait and see how the market will allocate forex without BDCs.

“Let’s see if banks that have severally been blamed for round-tripping will do it more effectively than BDCs. All the allegations against the BDCs are baseless because even if they exist, the CBN should learn to punish offenders.”

He however warned that the policy could lead to liquidation of majority of the BDC operators, leading to more job loss and more volatility in the forex market.

“I am sure the policy shift will be temporary and they will come back to their senses unless there is a better strategy to sell to small forex users,” Moses noted.