CBN to mop up N200m monthly from banks’ suspension from dollar sales

The Central Bank of Nigeria (CBN) has thrown more light on why it suspended 19 banks from selling dollar realised from international money transfer services to Bureau De Change in Nigeria. 

 Proceeds from cash transfer through licensed international agencies, like Western Union, Money  Gram, Ria and others were allegedly converted to naira before their beneficiaries in Nigeria are paid, while the foreign currency equivalent are sold to the BDCs at rates outside what the exchange rate is at the interbank money market.

 A further inquiry revealed that the suspension will lead to CBN mopping up about $200 million per month from the banks, which it will channel through the interbank market.

 This practice, which a spokesman of CBN said, has been sending some distortions into the foreign exchange market should be a loophole that must be closed for naira to maintain its expected value.

 “With this directive, you will no longer see the wide gap in the exchange rate that sees a dollar having above 50 per cent differential between the parallel market and the official market,” he stated.

 He said when the apex bank discovered that all the banks were wrongly selling to the BDCs, with only a few that did not follow in short-changing the system. 

 But those free were not affected by the apex bank’s policy mandating all banks to give up 25 per cent of the dollars received through international money transfer services to it.

Read also: How family member exposed Goodie Ibru to EFCC over alleged N1.8bn fraud

 As at last week, dollar exchanged for N312 in the interbank market and N415 at the parallel market, which CBN blames on the short practices between the BDCs and most the banks now suspended, except two unnamed ones.

 However an official of the Association of Bureaux De change Operators of Nigeria, (ABCON) Muhammad Hassan told Ripples Nigeria that the directive would rather than enhance the gains made so far in recent weeks, worsen it.

 “We have been out to help the government make dollar much more available to the end users, since most of them hardly get it from the banks. If there are any defaulters, they should be singled out and disciplined as against this blanket ban,” he said.

 But the affected banks said they would appeal for a reconsideration of the directive as was the case when nine banks were suspended for non remittance of NNPC funds in their vaults in July 2016.