Naira depreciation forces bureau de change operators to shut down operations in abuja
The significant depreciation in the value of the Naira against the United States dollar has forced Bureau De Change (BDC) operators to shut down operations in Abuja, Federal Capital Territory (FCT) as the dollar price keeps going up.
Penpushing reports that recently, naira recorded massive depreciation against the dollar amid scarcity of the greenback, while this week Nigeria’s currency plunged to an all-time low across both the official and unofficial segments of the currency markets, mounting pressure on the country’s fiscal and monetary authorities.
The Chairman of Bureau De Change (BDC) operators Abdulahi Dauran, had earlier on Wednesday announced that members will be shutting down operations to curb the unprecedented depreciation of the naira against the dollar.
Penpushing further reports that as at Tuesday the naira closed at an all-time low of N1,482 against the United States dollar on the authorised market, while data published on the FMDQ website eventually showed slight recovery on Wednesday after the local currency closed at N1,455/$1 on the spot market.
The currency, however, crossed the N1,500 and above mark at the parallel market on Wednesday raising concerns over the effectiveness of the Central Bank of Nigeria(CBN’s) policy intervention, and amidst this worrisome development, the apex bank in a new circular issued Wednesday ordered Deposit Money Banks to sell their excess dollar stock by February 1.
Penpushing also reports that Central Bank of Nigeria (CBN), pointed out that this has created an incentive for banks to hold excess long foreign currency positions, which exposes banks to foreign exchange and other risks.
The Central Bank of Nigeria (CBN) issued prudential requirements to banks to ensure that these risks are well managed and avoid losses that could pose systemic challenges, noting with concern the growth in foreign currency exposures of banks through their Net Open Position (NOP).
Penpushing reports that the apex bank as part of its new directives, ordered banks that their Net Open Position (NOP) limit of the overall foreign currency assets and liabilities taking into cognizance both those on and off-balance sheet should not exceed 20 per cent short or 0 per cent long of shareholders’ funds unimpaired by losses using the Gross Aggregate Method.
The findings by Penpushing Media on Thursday, however, revealed that several shops of Bureau De Change (BDC) operators located at the Wuse Zone 4 axis of Abuja were under lock and key as the known busy streets deserted.
Penpushing further reports that one of the Bureau De Change (BDC) operators Aliyu Wireless disclosed that members have been directed to close shops and operations as the dollar price keeps going up, adding that members are trying to control the rate.
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