Why The CBN Cut Dollar Sales to BDC’s In Lagos and Abuja
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.