Acting Governor of the Central Bank of Nigeria, Folashodun Shonubi Credit: Bloomberg / Contributor Source: Getty Images
CBN threatens to revoke 5,000 BDC licenses over infractions
CBN had engaged the BDC operators openly and privately and criticized them for what it felt was sabotage and market manipulation….CONTINUE READING
The operators have dismissed the allegations as misplaced by the market regulator.
Despite CBN holding over 5,000 registered operators responsible for the naira crash, ABCON has regularly rejected the narrative, asking the CBN to do the hard job of sanitizing the system.
On Tuesday, August 29, 2023, the ABCON president, Aminu Gwadabe, stated that the inability of the CBN to differentiate between the activities of speculators and registered ABSON members is troubling.
The narrative may resurface on Thursday, August 31, 2023, after the deadline by CBN that ABCON should enforce its recently issued guidelines.
The apex bank announced fresh guidelines to the operators to boost the efficiency of the Nigeria Forex market.
CBN alleges BDCs violated its guidelines
The document contains some reporting and trading rules to bring the market sanity.
The circular emphasizes that BDC operators’ trading margin is pegged at -2.5% to +2.5 % of the Nigerian Foreign Exchange Market window’s previous day’s weighted average.
CBN’s circular threatened licence revocation over failure to comply with the new directives by BDC operators.
The Guardian reports a 19% disparity between the black and official foreign exchange markets.
According to data from FMDQ, as of August 30, 2023, the naira exchanged for N920 at the black market and N775.34 at the official market.
Analysts believe the move is defeating the foreign exchange reform of President Bola Tinubu’s administration.
They say that if the CBN does not wield the big stick soon, the naira will crash to as low as N1,000 per dollar in the parallel market and above N800 in the official market.
Naira crashes to a new low of N910/$ as CBN piles pressure on BDCs, warns speculators and banks
Legit.ng reported that after days of showing some strength at both the official and parallel markets, the naira crashed again from N885 to a dollar to N910 per dollar at the black on Friday, August 25, 2023.
The development comes as buyers flood the parallel market searching for dollars for travel, school, and imports.
Naira falls at official market as buyers flood black market….CONTINUE READING
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