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The CBN Warns BDC Operators as Naira Continues to Lose Value Against Dollar
The CBN Warns BDC operators as the Naira depreciates and continues to lose value against the dollar. On Thursday, the naira further depreciated against the dollar at the official foreign exchange market, ending trading at N1,599.93 per dollar, a slight drop from N1,599.79 the previous day. This means the naira weakened by N0.14 in just one day, showing how the naira continues to lose value against the dollar. At the same time, in the black market, Bureau De Change (BDC) operators in Wuse Zone 4, Abuja, confirmed that the selling exchange rate remained at N1,620 per dollar, the same as the previous day.
This ongoing naira depreciation against the dollar has raised concerns, prompting the Central Bank of Nigeria (CBN) to issue a strong warning to BDC operators. The CBN reminded them to strictly follow anti-money laundering and counter-terrorism financing regulations. The bank announced plans to start “mystery shopping” exercises at BDC outlets to check if they are complying with these important rules. According to the CBN, BDC operators must fully comply with the Money Laundering (Prevention and Prohibition) Act, 2022, the Terrorism (Prevention and Prohibition) Act, 2022, and the 2024 regulatory guidelines for BDCs.
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The CBN’s warning comes at a time when the naira continues to depreciate despite several efforts to stabilize it. The CBN has taken steps like selling dollars to licensed BDC operators at discounted rates to increase the supply of dollars in the market and stop the naira’s recent fall. For example, the CBN sold $10,000 to each licensed BDC at N1,021 per dollar and instructed them to sell to customers at a rate not more than 1.5% above the purchase price, meaning a maximum selling rate of N1,040 per dollar. This move was meant to bring more dollars into the market and reduce the gap between official and black market rates.
However, the naira depreciation against the dollar has continued, with some blaming the rise of new cryptocurrency platforms and ongoing market speculation for the currency’s weakness. BDC operators have also reported challenges, such as not getting enough dollars from commercial banks as directed by the CBN, which further threatens naira stability. Limited access to foreign exchange, unfavorable rates, and fewer participating banks have made it harder for BDCs to operate smoothly, leading to more currency speculation and worsening the naira’s value.
The CBN has also set strict rules for BDCs, including a weekly cap of $25,000 that any BDC can buy from authorized dealers and a maximum disbursement per transaction of $5,000 quarterly. Any BDC or bank that breaks these rules risks having its license suspended.
Despite these challenges, some BDC operators are hopeful that ongoing reforms and increased investor confidence could help the naira recover in the future. But for now, the naira continues to lose value against the dollar, and the CBN is warning BDC operators to play by the rules as it tries to stabilize the currency.
As the naira depreciates and continues to lose value against the dollar, the CBN is taking tough measures and warning BDC operators to comply with regulations. The situation remains tense, with both the official and black market rates showing the naira’s ongoing struggle against the dollar.
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