CBN plans to bar BDCs from street trading, limits cash forex purchase to $500 – Newstrends
Connect with us

Business

CBN plans to bar BDCs from street trading, limits cash forex purchase to $500

Published

on

CBN Governor, Olayemi Cardoso

CBN plans to bar BDCs from street trading, limits cash forex purchase to $500

The Central Bank of Nigeria (CBN) is considering banning Bureau De Change (BDC) operators from street trading and limiting the cash payment for selling FX to a maximum of $500.  

The apex bank disclosed this in its proposed revised regulatory guidelines for BDC operators in Nigeria published by the bank.  

However, the proposed ban on street trading by BDCs is not new as the bank in its revised operational guidelines for BDCs in 2015 prevented street trading by BDCs. 

According to the bank, permissible activities by BDCs include; the acquisition of forex from approved sources, sales of FX in line with its guidelines, serving as cashout points for IMTOs etc.  

On the other hand, the apex bank prevented BDC from engaging in street trading, account maintenance, accepting deposits and granting of loans, facilitating international outward transfers, dealing in precious stones and metals, establishing subsidiaries and others.  

READ ALSO:

Forex sellers above $10,000 to declare their source 

Furthermore, the bank noted that sellers of forex above $10,000 are mandated to disclose the source of the forex and proposed to ban cash payment to customers for forex above $500. It also proposed to ensure digital transfer purchases of foreign currencies by customers are made to the BDCs naira account.  

  • It stated, “Sellers of the equivalent of USD10,000 and above to a BDC are required to declare the source of the foreign exchange and comply with all AML/CFT/CPF regulations and foreign exchange laws and regulations.
  • “Payments to customers for cash purchases of foreign currency, the equivalent of above USD500, shall be by transfer to the customer’s Naira bank account. If the customer is a non-resident (whether Nigerian or not), a BDC shall issue the customer a prepaid NGN card. Where such a card is issued, relevant maximum credit and cumulative limits, in line with relevant Know Your Customer requirements, shall apply.” 

What you should know  

The CBN in recent times have blamed the whopping depreciation of the naira to speculation with the Governor stating the naira is “undervalued” and with time returns to its true value.

The apex bank in the past few months has introduced a slew of initiatives aimed at boosting liquidity in the forex market and shoring up the value of the naira.  

  • The proposed regulation aims to sanitise the operations of BDCs across the country, limit the proliferation of BDC operators and enable the CBN to weigh in on their activities. The regulations although a proposal and subject to review over time. 
  • In the past weeks, security agencies such as the EFCC and DSS have begun a crackdown on street traders of foreign currencies in a bid to formalise the industry. Also, there have been reports of restrictions of Nigerian traders from accessing the Binance forex trading platform in what many adjudge to be a crackdown on the platform for Nigerians. 
  • One of the spokespersons to President Tinubu, Bayo Onanuga confirmed the report of the blockade of access of Nigerians to forex and crypto trading platforms Binance and Coinbase. 

CBN plans to bar BDCs from street trading, limits cash forex purchase to $500

Business

Naira records five-month highest gain, sells below N1000/$ at parallel market

Published

on

Naira records five-month highest gain, sells below N1000/$ at parallel market

The naira continued its positive showing against the United States dollar on Monday, selling below N1000/$ in some segments of the parallel market.

Newstrends reports that the Federal Government, groups and some individuals have mounted a spirited campaign for those hoarding the dollars to push them out as naira continues to appreciate.

On Monday, the naira was offered in some parts of Lagos and Abuja between N995 and N1,050 per dollar in the parallel market. It was N1,230/$ on Friday.
The latest gain, being over five-month highs, came in the wake of the Iranian attack on Israel and a rise in the crude oil price.
Goldman Sachs, American investment bank economists, had earlier predicted that the naira’s bullish momentum on the foreign exchange market would likely cause it to trade for less than N1,000 per US dollar in the coming months.
According to a report by Nairametrics, the group claimed that the rally in Nigerian currency helped recover from large losses after two devaluations since last June by being bolstered by capital inflows and successive interest rate hikes.
In March, Goldman Sachs projected that the Naira would appreciate to N1,200 per dollar in 2024.

At the official foreign exchange market, the rate was put at N1,136/$ in contrast with N1,205/$ last Friday.

The top bank has implemented several policy initiatives in recent months to bring stability to the foreign exchange market.
The CBN increased interest rates to 24.75% at the most recent meeting of the Monetary Policy Committee (MPC), which helped it recover losses from the two devaluations that occurred since June of last year.
Further gains for the naira result from the CBN’s ongoing intervention, which involves selling foreign exchange to Bureau De Change operators at a revised rate.
The market anticipates higher inflows of US dollars from the sale of foreign currency bonds in the second quarter as disclosed by Finance Minister Wale Edun.

The Federal Government has just offered high-yield short-term debt products at a premium to entice overseas capital into the economy.

The Middle East’s geopolitical unrest and
Notwithstanding a drop in Nigeria’s production volume, crude oil prices have risen beyond $90.

Nigerian grades of oil are trading at a premium to the ICE Brent benchmark.

The Middle East’s geopolitical unrest and the anticipation of an Iranian government strike on Israel caused oil prices to soar.

Continue Reading

Business

Breaking: Nigeria’s inflation rises to 33.2%, says NBS

Published

on

Breaking: Nigeria’s inflation rises to 33.2%, says NBS

The National Bureau of Statistics (NBS) says the nation’s inflation rate rose to 33.2 per cent for the month of March 2024.

This represents a 1.5 per cent increase over 32.7 per cent recorded in February 2024.

The NBS disclosed this in a new report released on Monday.

It explained that the rise was primarily due to higher costs of food, beverages, energy, and housing. Compared to February 2024, the inflation rate in March increased at a slower pace, with food inflation reaching 40.01% year-on-year.

NBS attributed the spike in food prices to the rising costs of items like garri, millet, yam tubers, and others. On a month-on-month basis, food inflation slightly decreased to 3.62% in March 2024.

Urban inflation also increased to 35.18% year-on-year in March 2024, while rural inflation stood at 31.45%.

Core inflation, which excludes volatile agricultural products and energy, was 25.90% year-on-year in March 2024.

Overall, the rising cost of living in Nigeria is evident in the significant increase in inflation rates across different categories.

It is crucial for policymakers to address these challenges to alleviate the financial burden on the population.

Continue Reading

Business

Nigeria’s oil production drops by 2.8 million barrels in one month 

Published

on

Nigeria’s oil production drops by 2.8 million barrels in one month 

The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has confirmed the data released by the Organisation of Petroleum Exporting Countries (OPEC), indicating a consecutive decline in Nigeria’s oil production for the second month in a row.

According to NUPRC reports, crude drilling operations in March saw a notable decrease, with production dropping from 1.42 million barrels per day (bpd) in January to 1.23 million bpd in March, marking a significant loss of approximately 2.8 million barrels over the month.

Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, acknowledged the declining trend, attributing it to issues on the Trans Niger Pipeline (TNP) and maintenance activities by oil companies in Nigeria during the period.

READ ALSO:

However, beyond crude oil, condensate production, which typically falls outside OPEC’s quota calculation, also experienced a decline in March, further exacerbating Nigeria’s overall production slump.

Despite efforts to address the situation and restore production levels, challenges such as oil theft and dwindling investments continue to hinder Nigeria’s ability to meet its OPEC quota consistently.

The repercussions of Nigeria’s reduced production are compounded by surging global oil prices, fueled by escalating geopolitical tensions, notably the looming threat of conflict between Israel and Iran.

Nigeria’s oil production drops by 2.8 million barrels in one month

Continue Reading

Trending

Skip to content