Weakening Of BDC Operations Weigh Heavily On Market As Naira Slides Further

The Nigerian local currency Naira fell significantly against the U.S. dollar at the parallel market on Wednesday; Twenty four hours after the Central Bank of Nigeria (CBN) came down hard on Bureau De Change (BDC) operators for allegedly facilitating money laundering and other Forex infractions.

The naira crashed by about five per cent, as the weakening of the BDC operations weighed heavily on the market, raising concern about the near-term outlook of the local currency. 

Earlier on Wednesday, naira traded at about N510/$ in Lagos, but fell to around N525/$.

The CBN had, on Tuesday, announced stoppage of sale of foreign exchange (FX) to BDC operators, whom the Governor, Godwin Emefiele, accused of anti-market activities and serving as “money laundering agents.”

The CBN had been supplying each licensed BDC $20,000 per week at the rate of N393 with the instruction that they should sell with a margin of N2 but some of them sell as high as N505, making over N100 on every dollar sold. An operator, Nura who spoke to newsmen said they “buy dollar around N507 and N510 while they sell around N512 and N513.”