The Nigerian Naira is currently trading at its lowest rates to the dollars ever in the black market, less than 24 hours after Central Bank of Nigeria (CBN) went tough on Bureau du Change operators.
Following the conclusion of the Monetary Policy Rate (MPR) meeting, Godwin Emefiele, Governor of the CBN, had announced that all weekly sales of foreign exchange will be made directly to commercial banks, with BDCs exempt.
He also called off the processing of applications for BDC licences in the country.
“We are concerned that BDCs have allowed themselves to be used for graft,” Emefiele had said, while also stating that there is nothing that BDCs can do better than banks.
“6,000 BDCs today add little or no value to the market,” Emefiele stressed.
As at 12 pm, a check on Aboki fx a website that collates black market rate shows that Naira has added to its N1 loss from yesterday and it is currently trading at N522/$1.
This represents a 3.36 percent or N17 decrease in value to the US dollar in 12 hours, when compared to its opening rate of N505/$1 on Wednesday.
Similarly, the black market rate for the British pound has fallen by almost 1 percent or N7.
British Pound is trading to the Naira at N710/£1 from N703/£1 it opened the day.
Also, Euro has hit the N600/€1 mark from the opening rate of N592/€1 on Wednesday morning.
The last time in 2016 CBN introduced a similar ban on the sale of dollars to BDCs, naira value dropped from N268 to a dollar in January to close at N498/$.
This represents 85.8 percent drop in value to the dollars, and Naira never recovered to its previous level again.
If history should repeat itself Naira by the end of December could be trading above N900/$1.
This has got many analysts worried, as they call on CBN to put together a strong mechanisms to ensure the policy works.
“This is a bold move from the CBN governor. If sustained could go a long way in achieving a single currency rate, but if it goes wrong we might have a repeat of 2016,” Kunle Ajayi an economist told Ripples Nigeria.
He also called on CBN to stop its intervention in the market and allow the domestic currency exchange at its value.
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