Reports reaching Nairametrics suggest that the CBN has issued a new circular banning all commercial banks except First Bank from the role of selling foreign remittances directly to licensed Bureau De Change (BDC).
The circular is yet to be published on the website of the Central Bank as at the time of penning this article.
Sources report that the BDC’s had complained vehemently to the Central Bank about the “apparent refusal’ of commercial banks to sell forex emanating from forex remittances to them contributing to the significant depreciation of the naira in the last few weeks. The naira had hit N490 early last week before recovering in the last few days.
The recovery is in part due to the sale of foreign remittances by Travelex this week leading to about N30 gain for the Naira.
President of the Association of Bureau De Change of Nigeria (ABCON), Alhaji Aminu Gwadabe, also weighed in positively on the new development negating any concerns that this may cause another spike in the price of the dollar.
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“It will ensure that more dollar are distributed to BDCs in uniform and transparent manner as some of the banks have not been selling funds from the international money transfer operators (IMTOs).
“If you check, since Travelex started selling to BDCs, speculation has reduced in the market and the naira is on the path of recovery. My advise to our members is to partner with the central bank on this project. I advice everybody to be patriotic, any member that goes against the rule would be punished,”
What the Ban Means
From what we gather from our sources, the CBN Ban means that the commercial banks (except First Bank) can only now sell their forex remittances to Travelex, who will then sell to the BDC’s.
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This suggest First Bank and Travelex are now the dealers to buy from if you need forex for PTA or BTA.
The implication for the market is not immediately known however analysts believe it may not negatively affect the price of dollars considering that these banks did not sell remittances to BDC’s in the first place.
The Banks may also not mind as they mostly prefer jealously holding on to their dollar hoards preferring to use it to cash back more lucrative use of forex for online purchases.
Critics also see this move as one intervention too many from a Central Bank hell bent on controlling the FX market that is supposed to be floating. Many blame (including insiders) the different prices available in the market to CBN’s policy of controlling supply and price instead of allowing market induced price discovery.
Experience buying from Travelex
Nairametrics has received mixed experiences from people who have bought from Travelex. Some have complained that they have not been able to get the full $4,000 limit available for PTA as it is still been rationed. Some however, confirm that they got their full allocations except that they had to appear at Travelex offices as early as 6 in the morning to be ahead in the queue. Queues are said to be often long and slow.
The physical dollar cash is not released till travelers have reached the boarding gates thus reducing cases of round tripping. Howeve, we also understand that payments are made at the counters.