CBN Increases Weekly Dollar Sale For BDCs To $50,000

It was pegged at $30, 000, penultimate week. The decision was reached following the Bankers’ Committee Meeting in Abuja, on Tuesday.

Directors of the apex bank and some Managing Directors of Deposit Money Banks who briefed journalists at the CBN headquarters, explained that the decision was to drive down the price of the dollar and ensure that people get enough to pay school fees as schools are about to reopen, and also because people who will be traveling at this period will require Basic Travel Allowance (BTA) and PTA, especially as students were to return to school.

“CBN and the Bankers Committee reviewed the present foreign exchange situation and being a responsive body, and knowing that increasing the amount that BDCs get will deal with the issues at hand today, especially as people are going back to school, and have other responsibilities to travel abroad during this period,” the Managing Director of United Bank for Africa UBA, Mr. Kennedy Uzokam, said.

“Do we say let’s hold on to our position when we know the reality? My view is that we shouldn’t do that, and that was the considered position of the Bankers Committee at the meeting today,” Uzoka explained, briefing on the outcome of the meeting.

“We believe that this development will make more cash available to the BDCs and increase the supply and this will help drive down price,” he added, assuring that the committee would continue to respond, as long as it is necessary to move the economy to the desired goal.

Acting CBN Director of Corporate Communications Isaac Okorafor said the apex bank “will now monitor strictly to ensure that people do not abuse the process”.

On the issue of increasing the amount from $30,000 to $50,000, the bankers’ committee noted that the decision was not a reversal of the earlier decision but a tweaking of the earlier decision because the country is battling a dollar crisis.

Reacting to the verdict, President of the Association of Bureau De Change Operators of Nigeria (ABCON) Aminu Gwadabe said he was surprised that the CBN decided to raise the weekly allocation at a time were banks are finding it difficult to meet the $30,000 limit.

Many of the banks, he said, were not even selling to BDCs, but preferred to return the cash to the CBN because of the limited time they can hold the funds. “We should be happy that the volume has been increased but unfortunately, the majority of the BDCs in Port Harcourt, Kano, Benin and other states are not getting the funds,” he said.

Gwadabe further stated that the BDCs started funding their accounts since last week, adding that many of them could not even access $10,000 weekly let alone $30,000 or now $50,000.

Speaking also, the CBN’s director of Banking Supervision, Mrs Tokunbo Martins, noted that a decision was taken at the end of the bankers’ committee meeting to start disbursing the special intervention fund to support primary agricultural projects and core manufacturing.

“The CBN took from the bank’s cash reserves called the special intervention fund. That fund has been with the CBN for some time,” she said.

According to Martins, the fund, will be “for projects that support import substitution, projects that will help protect foreign exchange such that whatever we were importing before can be manufactured.”

The funds, she added “will be released to these kinds of projects; it will not be released to just any kind of project. And once these funds are released, there will be some ease on the system and there will be more liquidity, so important projects will get financing at a lower single digit interest rate.”