Over the last year, obtaining foreign exchange has been very difficult in Nigeria as the collapse in global oil prices led to a scarcity of US dollars. This in turn promoted the CBN to limit the amount of foreign currencies made available to commercial banks and a limit was also set on how much they could provide to BDCs.
Many Nigerians and foreign businesses have thus struggled with the new regime as it has meant them being unable to access cash for foreign purchases. Last week, BDCs were only allowed to offer BDCs $30,000 but with the limit now being lifted, it is expected that some of these cashflow worries will ease.
After a Bankers’ Committee Meeting in Abuja, yesterday CBN directors and managing directors of deposit money banks, explained that the decision was to make more foreign exchange available to members of the public, especially as students were to return to school. Many Nigerian parents with children studying abroad have been unable to pay school fees die to the scarcity of foreign exchange.
Kennedy Uzokam, the managing director of United Bank for Africa, said: “As you all know, the issue of making foreign exchange available to Nigerians has been very topical and the CBN has been working hard to address this. About two weeks ago, a policy was released that made banks to sell monies to BDCs and BDCs are supposed to pass these monies to Nigerians to meet various needs.
“At the meeting today and as expected, we got feedback from the market and the CBN being a responsive regulator has decided to move the limit from $30,000 per BDC to $50,000. We believe that this development will make more cash available to the BDCs and increase the supply and this will help to drive down the price.”
CBN spokesman Isaac Okoroafor, explained further that the decision to raise the volume of cash sold to BDCs was, to ensure that, especially now that students are going back to school, they get enough for school fees and maintenance allowances. He said that the CBN would strictly monitor the process to ensure that it is not abused, warning that, any BDC that tries to circumvent this decision will be severely punished.
CBN director of banking supervision Tokunbo Martins, said that the apex bank would also disburse the special intervention funds to specialised sectors, such as primary agricultural projects and core manufacturing. She added that this would have a direct impact on employment, wealth creation and projects that can help conserve foreign exchange.
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