CBN issues new directives on foreign currency street trading as Naira falls

  • The Central Bank of Nigeria has issued a directive to exchange house operators on street trading
  • The bank’s risk management director, Blaise Ijebor, said street currency trading is not permitted.
  • He said traders should be in offices where customers can come in and make transactions.

Legit.ng’s Pascal Oparada has reported on technology, energy, stocks, investing and economics for over a decade.

The Central Bank of Nigeria (CBN) has banned street foreign exchange trading by Bureau de Change (BDC) operators, citing the need to properly regulate the foreign exchange market.

CBN risk management director Blaise Ijebor said street trading of foreign currencies is not allowed because the apex bank does not want BDCs under trees.

CBN talks about street currency trading
The administration of CBN Governor Olayemi Cardoso is tough on street currency trading. Credit: Bloomberg
Source: Getty Images

CBN reviews capital requirements for BDCs

He said merchants should be in offices where customers can come in and exchange their coins.

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The apex bank issued a new directive for BDCs to reapply for operating licenses.

The bank also revised the minimum capital requirements for Tier 1 BDC operators to N2 billion and N500 million for Tier 2 licences.

Ijebor reportedly said that the capital increase is aimed at giving BDCs enough money to invest in the infrastructure needed to provide adequate services and comply with regulations.

Naira falls in all markets

The naira reversed its gains after a four-day winning streak, falling 1.55% to close at N1,485.66 in the official market on Thursday, May 23, 2024.

The drop comes after the naira maintained a steady rise in the official market before breaking down on Thursday, May 23, 2024.

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The Nigerian currency fell to its lowest level since March 20, 2024, when it was trading at 1,492.61 naira per dollar.

Last week, the naira rose steadily, gaining against the US dollar, starting with N1,497.33 per dollar on Friday, May 17, 2024, a gain of 2.45%.

Nigerian forex market sees high supply of dollars

Legit.ng reported that the Nigerian foreign exchange market has recorded an increase in foreign exchange supply, leading to the recovery of the Nigerian currency for the third day in a row.

Official figures from the FMDQ Exchange put the total foreign exchange volume in the market on Tuesday, May 21, 2024 at $268.19 million, which has led to the naira maintaining stability in the market.

The figure represents an increase of more than 60% compared to the previous day, with 161.41 million dollars.

Source: Legit.ng