The CBN on Friday released a list of about 2,998 Bureau De Change operators who are expected to participate in the new exchange rate regime. The CBN in its monetary policy committee communique on Tuesday, announced that it was shifting gear thus adopting a flexible exchange rate policy which Nairametrics believes is a “semi float” of the Naira.
The Bank confirmed this in a circular published on its website titled “Updated List of Confirmed Bureaux De Change in Compliance With New Requirement”. The CBN in January banned the sale of forex to BDC’s accusing them of round tripping. Back then the CBN said it had 2,786 BDC suggesting they have just issued new licenses. The apparent U-turn is therefore an indication that the CBN will need the BDC’s to help ensure that its new “flexible exchange rate” policy works.
Analysts believe the new policy will now see commercial banks, BDC’s and other approved forex dealers buy and sell forex via a market determined mechanism effectively dumping its fixed currency regime previously imposed on the market. They therefore would need to BDC’s to help ensure that the market is robust while eliminating another shadow economy.
Critics however believe the reintroduction of BDC’s might be bad for the market as they might end up engaging in the same arbitrage activities that took place before they were banned. For example, rogue commercial banks can declare artificial scarcity after selling block dollars to BDC’s. BDC’s will then add a premium to the price obtained from the back door from banks for onward sale to end users.
The CBN is yet to confirm if indeed, the list is directly linked to its new policy.
