Nairametrics| There are indications suggesting that the Central Bank of Nigeria (CBN) would raise the dollar supply to Bureau de Change (BDC) operators in the coming week to $40,000, ThisDay claims.
If this holds true it will represent a 100% increase over the $20,000 each BDC received this week and a whopping 400% increase over the $8,000 per week supply they were limited to last week. The move is in line with its aggressive bid to achieve exchange rate convergence and stability.
The question however, is whether BDCs can actually keep up with the dollar liquidity the CBN is flooding the market with. For example, of the $100 million offered by the CBN on wholesale spot this week, authorized dealers were only able to pick $45 million, indicating a fall in forex demand.
Industry experts attributed the slump in demand to the rate of forex liquidity being pumped into the system by the CBN. This was also attributed to the new trend in the general cash crunch in the financial system. The question, now is why increase dollar supply to BDCs who cannot use them up for now? Is the CBN not luring the BDCs into sharp practices amidst this dollar rain?
The current oversupply of the dollar would however be pleasing to the CBN whose spokesperson, Isaac Okarafor had stated one of the aims of the various interventions as ensuring “that the forex market will remain liquid and that Nigerians who genuinely require the forex will get ample access to the currency”
