ANNOUNCEMENT

Worship with us @ Mountain of Fire Miracles Ministries, Budapest, Hungary Address: 1081 Bp II János Pál Pápa tér 2 (formerly Köztársaság tér) Direction: From Blaha, take tram 28, 28A, 37, 37A, 62...1 stop. From the traffic light cross to the other side... Or take Metro 4 & get off @ János Pál Pápa tér
Time of worship: Wednesdays @ 18:30 hr Sundays @ 10:30 hr
Tel: +36 203819155 or +36 202016005

God bless


Wednesday, 13 January 2016

FINANCE/BANK

CBN lifts ban on dollar deposits, withdrawals
 From Isaac Anumihe, Abuja and Blaise Udunze


AS exclusively reported by Daily Sun on Monday, the Central Bank of Nigeria (CBN), yesterday lifted its ban on foreign currency deposits and withdrawals by customers from comercial banks.



This is coming as it also embargoed further foreign currency sales to Bureau de Change (BDC) operators. Daily Sun had on Monday, hinted that the apex bank might relax some of its policies in respect of domiciliary account following constraints Nigerian bank customers are having making foreign currency related transactions from their bank accounts.


The apex bank also decided to provide the available but highly limited foreign ex- change to meet matured letters of credit from commercial banks for importation of petroleum products, critical raw materials, plants, and equipment, and for payments of school fees, BTA, PTA, and related expenses.


Addressing newsmen yesterday, in Abuja, CBN Governor, Godwin Emefiele said it took the decision fol- lowing recent developments in the nation's foreign ex- change market and to arrest the continued depletion of the reserves.


"We have continued to observe that stakeholders in some of the subsectors have not been helpful in this direction. In particular, we have noted with grave concern that Bureau de Change (BDC) operators have abandoned the original objective for their establishment, which was to serve retail end users who need US$5,000 or less. Instead, they have become wholesale dealers in foreign exchange to the tune of mil- lions of dollars per transaction'' he said.


Emefiele lamented that the situation has gone so bad that operators of the BDCs now use fake documentations like passport numbers, BVNs, boarding passes, and flight tickets to render weekly re- turns to the CBN.


"Despite the fact that Nigeria is the only country in the world where the Central Bank sells dollars directly to BDCs, operators in this segment have not reciprocated the bank's gesture to help maintain stability in the market'', the governor, said.


He noted a situation where the apex bank has continued to sell US Dollars at about N197 per dollar to these operators, and they in turn sell to ordinary Nigerians, at rates as high as N250 per dollar.


According to him, given this rent-seeking behaviour, it is not surprising that since the CBN began to sell foreign ex- change to BDCs, the number of operators have risen from a mere 74 in 2005 to 2,786 BDCs today adding that the CBN receives close to 150 new applications for BDC licences every month.


"Rather than help to achieve the laudable objectives for which they were licensed, the bank has noted the following unintended outcomes: avalanche of rentseeking operators only interested in widening margins and profits from the foreign exchange market, regardless of prevailing official and interbank rates; potential financing of unauthorised transactions with foreign exchange procured from the CBN, gradual dollarization of the Nigerian economy with attendant adverse con- sequences on the conduct of monetary policy and subtle subversion of cashless policy initiative; and Prevailing ownership of several BDCs by the same promoters in order to illegally buy foreign currencies multiple times from the CBN. The governor said that more disturbing, though, is the financial burden being placed on the bank and its limited foreign exchange.


"The CBN sells US$60,000 to each BDC per week. This amount translates to US$167 million per week, and about US$8.6 billion per year. In order to curtail this reserve depletion, we have reduced the amount of weekly sales to US$10,000 per BDC, which translates into US$28.4 million depletion of the foreign reserve per week and US$1.476 billion per annum'' he said.


He described such operations as a huge hemorrhage on the nation's scarce foreign ex- change reserves, and cannot continue especially because BDCs have become a conduit for illicit trade and financial flows.


The apex chief noted that in view of the above, the management of the Central Bank of Nigeria has reached the following decision, which take immediate effect: 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'' he said, adding that CBN would now permit commercial banks in the country to begin accepting cash deposits of foreign exchange from their customers.


CBN's action'll lead to 12000 job losses -BDAN


Meanwhile BDC operators have said the latest move by the apex bank will see the value of the naira hitting N300 to the dollar before the end of the week even as an estimated 12,000 would be on the line.


Reacting to the CBN announcement yesterday, the acting president of the Association of Bureau de Change


Operators of Nigeria (AB- CON) Aminu Gwadabe, in a telephone interview with said if the CBN decision is not well managed, "I see the dollar reaching N300 before the end of the week.


He noted that this would in turn lead to a "cost inflation" as the country is an import dependent economy, importing almost all its needs. Asides this, he said many BDCs will be forced out of business leading to job losses in the sector.


He noted that on the average, each BDC employs four persons, adding that about 12,000 jobs could be lost as a result of the CBN's action. He explained that BDCs have limited sources of foreign exchange and had to rely on the CBN window.


"In other economic BDCs don't have access to the central bank window because they have other sources of forex to them which includes banks but in Nigeria banks are being restricted from selling to BDCs, exporters can also patronise BDCs in other country's but here it is being restricted. These are some of the issues."


He then urged the CBN to review downwards the N35 million cautionary deposit mandated for BDCs as ac- cording to him, "this has tied down the capital of many BDCs and to get other source of foreign exchange we need capital."


He also noted that the move by the CBN will further en- courage activities of street hawkers and illegal foreign exchange operators "because most people will say why do I have licence since I don't have access to the CBN window, so I better operate as an illegal operator.



This he said will make it impossible for the apex bank to monitor the outflow and inflow of forex into the country and what the forex is being used for.

No comments:

Post a Comment

COPYRIGHT

COVER STORY

MY SMALL VOICE COLUMN

MY SMALL VOICE COLUMN
Odd jobs stacked against EU immigrants

COLUMN: MY SMALLVOICE

COLUMN: MY SMALLVOICE
TV2's false report about Nigerians in Hungary

MY SMALL VOICE

MY SMALL VOICE
Remembering a true prophet, Bob Marley...click on photo to read

MY SMALL VOICE

MY SMALL VOICE
Subsidising fraud & lies & blood...click on photo to read

MY SMALL VOICE:

MY SMALL VOICE:
Libya: The return of colonialist bondage.

Editor's Mail

Love the article on Gaddafi
We must rise above tribalism & divide & rule of the colonialist who stole & looted our treasure & planted their puppets to lord it over us..they alone can decide on whosoever is performing & the one that is corrupt..but the most corrupt nations are the western countries that plunder the resources of other nations & make them poorer & aid the rulers to steal & keep such ill gotten wealth in their country..yemen,syria etc have killed more than gadhafi but its not A̷̷̴ good investment for the west(this is laughable)because oil is not in these countries..when obasanjo annihilated the odi people in rivers state, they looked away because its in their favour & interest..one day! Samosa Iyoha

Hello from
Johannesburg
I was amazed to find a website for Africans in Hungary.
Looks like you have quite a community there. Here in SA we have some three million Zimbabweans living in exile and not much sign of going home ... but in Hungary??? Hope to meet you on one of my trips to Europe; was in Steirmark Austria near the Hungarian border earlier this month. Every good wish for 2011. Geoff in Jo'burg

I'm impressed by
ANH work but...
Interesting interview...
I think from what have been said, the Nigerian embassy here seem to be more concern about its nationals than we are for ourselves. Our complete disregard for the laws of Hungary isn't going to help Nigeria's image or going to promote what the Embassy is trying to showcase. So if the journalists could zoom-in more focus on Nigerians living, working and studying here in Hungary than scrutinizing the embassy and its every move, i think it would be of tremendous help to the embassy serving its nationals better and create more awareness about where we live . Taking the issues of illicit drugs and forged documents as typical examples.. there are so many cases of Nigerians been involved. But i am yet to read of it in e.news. So i think if only you and your journalists could write more about it and follow up on the stories i think it will make our nationals more aware of what to expect. I wouldn't say i am not impressed with your work but you need to be more of a two way street rather than a one way street . Keep up the good work... Sylvia

My comment to the interview with his excellency Mr. Adedotun Adenrele Adepoju CDA a.i--

He is an intelligent man. He spoke well on the issues! Thanks to Mr Hakeem Babalola for the interview it contains some expedient information.. B.Ayo Adams click to read editor's mail
Watch live streaming video from saharareporters at livestream.com

Daily Calendar

Popular Posts

Our Blog List