Reports emerged on Monday that the Central Bank has reduced the value of dollar sales to BDC operators from $15,000 to $8,000 weekly. This has contributed to the further slide of the Naira which closed on Monday at N473 (black market).

Why the CBN cut sales

  • The CBN was too focused on selling to BDC’s in Abuja and Lagos thus starving BDC’s in other cities in the country of forex.
  • The CBN therefore decided to sell to other states thus reducing the ration that was hitherto allocated to Lagos State.
  • This has now triggered a further depreciation of the naira in Lagos and in Abuja, two states which typically decide the exchange rate in the parallel market.

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