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Dollar to naira exchange: How shutdown by Bureau de Change go take affect naira to dollar exchange rate and black market

Wia dis foto come from, Getty Images

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Di naira fall to im lowest in history against di dollar as e exchange for over N1,500 for 1 dollar on January 31, 2024

Bureau de change operators for Nigeria capital, Abuja, don shutdown business starting from Thursday. Dia counterparts for Kano, Nigeria second largest city, go also lock shop by 12 noon.

Dis dey come as di naira record im lowest fall against di US dollar, as e dey currently exchange above N1500 to one dollar.

Mohammed Mustapha, di assistant provost marshal of di bureau de change union for Abuja tell BBC Pidgin say di decision na sake of say dem no happy as naira dey tumble against di dollar everiday.

Remember say for 2021, di Central Bank of Nigeria led by Godwin Emefiele, bin ban selling of forex to BDCs sake of say e don become channel to dey do mago-mago. But e later lift di ban in August 2023.

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Dis plaza for Wuse Zone 4 area for Abuja, wia many BDC operators get office

Mustapha say di BDC association dey vex say goment and Nigeria pipo dey look dem bad eye, dey point dem bad finger over di foreign exchange wahala for di kontri.

“So na im make we decide say we no go do business today, make we see whether true true na we dey cause wetin dey happen,” e tok.

“As e be now, na di internet dey decide di price of naira to di dollar, no be BDCs. Di cryptocurreny platforms like binance na dem dey drive di prices go high.

“Like dat yesterday (January 31) when di parallel market dey sell dollar for N1,420, binance dey sell am for over N1,590, oda cryptocurrencies dey for even N1,600.

“And nobody know di offices of dis cryptocurrencies, evri small tin na we di goment go come our office begin dey talk to us, but na dis cryptocurrencies dey control di market.”

Mustapha tok say e go better make goment ban all di cryptocurrency platforms “make we see whether di price of dollar against naira no go stabilise small”.

On how long dem go continue dia protest, Mustapha tok say dem go monitor di effect of di first day bifor dem go decide whether to continue.

Cryptocurrencies no dey recognised by di Nigeria goment, but e no dey illegal for person to trade am.

In 2021, di CBN bin place a ban on cryptocurrency transactions for Nigeria banking system as dem tok say pipo dey use am for money laundering and terrorism financing.

However, in December 2023, di apex bank lift di ban come tok say e go provide regulation for financial institutions to manage crypto and avoid misuse.

How BDC shutdown go affect Fx market?

Economic analysts wey chook mouth for di mata tok say di current situation of di Nigerian naira don pass wetin dey driven by di parallel market.

So long as Nigeria kontinu to be a one-commodity dependent economy, our currency go always dey suffer against di dollar, Roman Oseghale, a business and economic intelligence analyst tok for interview with Channels TV.

Paul Alaje, anoda well known economist agree wit am. Alaje tok say, according to statistics, 80% of imports into Nigeria na finished products, while na only 5% of our exports be finished product.

“Even di crude oil we dey export e no be finished product, e gatz dey refined into petroleum products and we go still import dem. Na di demand for foreign exchange to take process all dis imports, na im dey drive di price of dollar go high,” Alaje tok.

“Time don reach make goment begin try to change am. We suppose focus on our manufacturing sector, improve production of finished products. We also need to fix security and grow our agricultural sector and find way to halt inflation wey dey largely driven by di rise in food prices.”

On di short term, Alaje tok say goment suppose put policy in place to discourage commerical banks and individual persons from hoarding dollars.

“As e be now, plenty banks and individual pipo get large amounts of dollars cash for dia possession, and e no suppose to be like dat,” e tok.

CBN order banks to sell dia excess FX

Wia dis foto come from, OLAYEMI CARDOSO

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CBN Governor, Olayemi Cardoso

Di Central Bank of Nigeria, on Wednesday, order banks to sell dia excess dollar stock latest by Thursday, February 1, 2024.

Di bank also warn lenders make dem no dey hoard excess foreign currencies for profit.

“Di Central Bank of Nigeria don note wit concern the growth in foreign currency exposures of banks through their Net Open Position (NOP). Dis don create incentive for banks to hold excess long foreign currency positions, wey dey expose banks to foreign exchange and other risks,” di circular tok.

CBN Director, Trade and Exchange, Hassan Mahmud, and Director, Banking Supervision, Rita Sike, wey sign di circular tok say any bank wey no comply wit di directive “go face immediate sanction and suspension from di foreign exchange market”.

An economic expert wey tok to Punch Newspaper tok say “di idea be say if banks sell all dia excess dollars, liquidity go dey and di exchange rate go stabilise.”

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