CBN lifts ban on dollar deposits, stops sale to BDCs

The Central Bank of Nigeria (CBN) lifted on Monday the ban on deposits of foreign exchange in commercial banks just as it, however banned sales of foreign currency to Bureau de Change (BDC) operators in the country.

The CBN reversal of self from ban on making cash deposits in commercial banks is against the back­drop of agitations by bank customers nationwide on the problems constituted by the earlier ban by the CBN, thereby limiting citizens in meeting their foreign exchange transac­tions.

The CBN Governor, Godwin Emefiele made the disclosure yesterday while giving updates on developments on Foreign Exchange Market and de­cisions it had so far taken in carrying out its man­dates as contained in CBN Act 2007.

According to the CBN Governor, it has with im­mediate effect resolved that “The Bank would henceforth discontinue its sales of foreign exchange to BDCs. Operators in this segment of the market would now need to source their foreign exchange from autonomous source.

''They must, however note that the CBN would deploy more resources to monitoring these sources to ensure that no operator is in violation of our anti-money laundering laws. The Bank would now permit commercial banks in the country to begin accepting cash deposits of foreign exchange from their customers.''

Emefiele explained that these measures were not intended to be punitive on anyone or any group, but were meant to “ensure that the CBN is better able to carry out its mandate in an effective and efficient manner, which guarantees preservation of our scarce commonwealth, and that our hard-earned financial system stability remain intact to the benefit of Ni­gerians.''

The CBN governor re­counted that following global economic chal­lenges and the drop in crude prices from a peak of US$114/barrel in July 2014 to as low as US$33/barrel in January 2016, the country’s reserves had suffered great pres­sure from speculative at­tacks, round tripping and front loading activities by actors in the Foreign ex­change market.

According to him, “This fall in oil prices also implies that the CBN’s monthly foreign exchange earnings has fallen from as high as US$3.2 billion to current levels of as low as US$1 billion. Yet, the demand for foreign ex­change by mostly domes­tic importers has risen significantly.