The Central Bank of Nigeria, CBN has announced that it has suspended licenses of 195 Bureau de Change, BDCs.
In a statement released on behalf of the CBN, BDCs who had their licenses withdrawn for series of infractions.
It would be recalled that the CBN had stopped selling Forex to BDCs after it cited sharp practices which contributed to the deterioration of the Naira (NGN) against the Dollar (USD).
After the creation of the single market and a Naira-settled OTC futures market, the CBN re-instated the inclusion of BDCs with stringent rules to guide how the parallel market will operate in relation to the interbank window.
To also ensure that BDCs get the needed Forex liquidity, the CBN did increase their weekly allocation from USD30,000 to USD50,000. All these measures have not yielded serious results.
While many BDC operators complain of inconsistent allocation by the CBN through authorised banks, activities of many BDCs has contributed to the escalation of the Forex crisis. Speculators and market have infiltrated the parallel market to further decimate the Naira through the diversion of weekly allocations, falsification of returns and allocated monies.
The parallel market seems to be a thorny section of the market for the CBN to properly regulate. The suspension of 195 BDCs might not end the menace. The CBN needs a more strategic approach.