Nigeria’s naira recorded a sharp loss in value to the dollar on Wednesday, a day after the Central Bank of Nigeria (CBN) banned foreign exchange sales to Bureau De Change (BDC) operators in the country.
Black market dealers on Wednesday were selling the naira at ₦522 per dollar, up from N505 to $1 on Tuesday, according to abokifx.com.
But at the importer & exporter (I&E) window, the dollar traded for ₦411.52 per dollar.
The current rate is the second weakest since February 2017.
CBN on Tuesday said the ban was necessary because the parallel market has become a conduit for illicit forex flows and graft.
“We are concerned that BDCs have allowed themselves to be used for graft,” Emefiele said in a live TV broadcast after the bank has retained its benchmark policy rate after the Monetary Policy Meeting (MPC).
“This measure is not punitive on anyone, but it is to ensure the CBN is able to carry out its legitimate mandate of serving all Nigerians.”
Emefiele then mandated commercial banks to immediately and transparently sell forex to customers who present the required documents, saying all banks are to immediately create dedicated tellers for the same purpose.
While some economists have applauded the CBN’s courage to impose the ban, others fear that it may be forced to reverse the ban with internal and external pressures.