The issue of Naira and Dollar, Naira Depreciates, CBN Contemplates Closing BDC Window

The naira has been one of the worst hit currencies in 2015 on the continent following the crash in global oil prices, hitting an all-time low of N280 to the dollar at the parallel market. This was spiked by the declining level of Nigeria’s external reserves which depreciated by 14.9 per cent in the course of the year.
The reserves had fallen from $34.46 billion which it was as at December 31, 2014 to $29.34 billion as at December 22, 2015 according to the latest figures given by the Central Bank of Nigeria (CBN) on its website, covering barely four months of imports.
Last year December, the naira sold at N168 to the dollar at the official wholesale Dutch Auction anchored by the CBN and has within the year been devalued by 17.26 per cent to N197, while the parallel end of the foreign exchange market, the currency depreciated by 45 per cent to N265 as at last weekend from N183 which it was selling this time last year.
The consistent decline in the nation’s reserves hap prompted the apex bank to take drastic actions such as the suspension of the retail Dutch Auction System (rDAS) as well as a tighter control over the dollar outflow through the banks as well as the Bureaux de Change (BDCs).
According to the acting president of the Association of Bureau de Change Operators of Nigeria (ABCON) Aminu Gwadabe, BDCs had been brought to the fore at the Nigerian forex market to converge rates at the parallel and official market.
Meanwhile, rumours have begun to fly that the apex bank has concluded plans to stop the sales of foreign exchange to BDCs. Although the report has not been confirmed by the CBN, ABCON acting President told Leadership that the apex bank had not informed the association of the closure of its windows.
Gwadabe who noted that Nigeria is one of the few countries where the central bank still sells foreign exchange to BDCs, noted that there are several other ways where BDCs could source foreign exchange outside the CBN window.
Stating that “BDCs in other climes don’t have access to the CBN window” he listed as sources of forex tourists as well as exporters, even as he added that feelers from the apex bank indicates that “they are going to introduce cards instead of cash and credit our Dom account instead of giving us cash and we will also credit thes Dom account of the beneficiary end user so that when he travels he can access his Dom account and withdraw the cash from there.