Forex ban affecting price of stockfish in Nigeria: Norwegian envoy. The Norwegian ambassador said on Thursday that the ban on forex had resulted in inflated cost of stockfish in Nigeria. Stockfish, a popular delicacy in southern Nigeria, is costly due to ban on Forex for its importation, says, THE Central Bank of Nigeria (CBN) has said it will not sell foreign exchange (FX) to Bureau De Change (BDC) operators in the country. The CBN Governor Godwin Emefiele, who announced this at the end of the Monetary Policy Committee’s meeting in Abuja on Tuesday, accused the operators of dollarising the economy The CBN will need to move fast to smoothen out administrative bottlenecks, as the ban is posed to create supply-chain challenges that may aggravate the FX crises. The additional point of creating a whistle-blower feature whereby customers should report banks who do not fulfil FX orders may likely add to the confusion in the near term as the new policy is rolled out
CBN bans customer-to-customer forex transfer
The th monetary policy meeting which was held on 27th July concluded with the Central Bank of Nigeria taking an aggressive stance to discontinue the supply of FX to Bureau De Change operators BDCs in order to clampdown on what Godwin Emefiele CBN Governor termed illegal activities being perpetrated by BDCs when ban forex exchange is supplied to them.
Nairametrics spoke with some financial analysts to assess the likely ban forex of this unanticipated action from CBN, and the new policy has been received with mixed reactions with varying degrees of concern regarding the likely impact of this new policy on the Nigerian economy.
Specifically, ban forex Governor mentioned that there are over 5, Ban forex, this is in addition to the various bank branches all supplying FX to Nigerians. Therefore, simply eliminating BDCs automatically puts more pressure on existing bank branches to meet the uptick in footfall. Therefore, clients should expect to experience some inconvenience as they place FX orders and ban forex to pick them up from their branch. The CBN will need to move fast to smoothen out administrative bottlenecks, as the ban is posed to create supply-chain challenges that may aggravate the FX crises.
The additional point of creating a whistle-blower feature whereby customers should report banks who ban forex not fulfil FX orders may likely add to the confusion in the near term as the new policy is rolled out. From an implementation perspective, Mr Obi-Chukwu noted that the CBN in collaboration with Nigeran banks had recently shown capabilities of operational innovation for new policies. An example is the recent Naira4Dollar incentive which had a largely seamless implementation.
Perhaps, this is an area where FinTech solutions on retail FX orders and settlement delivery will come in handy as the banks will need to automate retail FX since they will have to deal with footfall uptick, ensure fulfilment and smooth out bottlenecks; especially, now that ban forex CBN is mandating they implement that Automation.
Victor Aluyi, Vice president and Head of Portfolio Management at Comercio Partners Asset Management opined that any perceived reduction of supply may lead to the deprecation of the naira, as speculators may take this as a sign that FX inflow challenges are worsening.
As a baseline, ban forex, Nigerian banks have the branch network to facilitate retail FX sales and with the advent of mobile technology, the usefulness of BDCs to the economy is immaterial. In other words, ban forex, the BDCs are providing a service that banks can easily subsume. Therefore, redirecting transactions to bank branches instead of the BDCs should not cause any long-term ripples….
except with two caveats:. The first caveat is timing. This is the beginning of the summer holidays when covid-related travel restrictions have been eased so we expect an increase in demand by retail users for FX which the banks now need to deal with.
The second caveat is perception. There is already an FX squeeze where many consumers have been in queues waiting for FX supply and so the market sentiment is skewed against the Naira, ban forex.
There is a risk that the impact of the announcement will be exaggerated and if market participants perceive this as a negative for supply, ban forex, it could induce panic and drive rates up in the immediate term. In summary, most analysts agreed that the ban forex of the Ban forex should NOT be a major cause for alarm if the CBN and banks can get their acts together to ensure this announcement does not create administrative bottlenecks or cause panic buying.
Albeit, that the elimination of BDCs may not be the silver bullet to halt the ongoing ban forex of the Naira which is partly attributable to ongoing FX supply issues in the overall economy.
what regulations does the CBN have in place on BDCs to checkmate their activities? what happens to the around 35M naira deposits that BDCs have with the CBN, which most have not recouped? these are issues and while the CBN is point 1 finger at the BDCs, 4 fingers are pointing back at the CBN.
The effect of the policies on BDC is that staffs of the BDC will no longer be needed as a result creat more people to be unemployed. However, the horse should pull the cart as implied in the quote below. Do you think this will cause the naira to fall?
People are rushing to buy dollars in order to make a profit when the naira falls. The new policy just created a new lucrative black market for anyone who understands fx, the short time implication is that naira might depreciate against the dollar, leading to more inflation, long time effect, ban forex is none, the union of bdcs will meet with the cbn and agree with their demands, so it will just be a temporary ban and back to business.
Why not implement a new and effective FX system with banks before disengaging BDCs? The truth is ban forex most Nigerians that need FX are not necessary traveling or trying to pay school fees. Most FX buyers are small business owners so the I am not sure ban forex the banks can be effective in solving this dollar distribution debacle.
The clueless CBN never ceases to amuse. This action is vintage CBN, always blowing ineffective smoke. The banks are worse than BDCs when it comes to FX abuse and corruption in FX management, ban forex.
The banks do this knowing they have CBN cover since all are involved in the FX racket; CBN, banks and BDC. They will put all sorts of road blocks and the FX ends in the black market. Mark my words, by Decemberit will be naira to 1 dollar. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Home Markets Currencies.
July 29, in CurrenciesFinancial ServicesSpotlight, ban forex. Share on Facebook Share on Twitter. Related posts. Updated: Twitter partners with Strike to add Bitcoin to its Tipping feature September 23, FG considers taking Rivers, Lagos states to Supreme Court over VAT collection September 23, ban forex, Tags: BDC forex ban Featured, ban forex.
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Analyst speaks on CBN’s ban on sale of FOREX to BDC’s
, time: 4:29In Which Countries Is Forex Trading Illegal? Banned Globally – Stay At Home Trader
THE Central Bank of Nigeria (CBN) has said it will not sell foreign exchange (FX) to Bureau De Change (BDC) operators in the country. The CBN Governor Godwin Emefiele, who announced this at the end of the Monetary Policy Committee’s meeting in Abuja on Tuesday, accused the operators of dollarising the economy Forex ban affecting price of stockfish in Nigeria: Norwegian envoy. The Norwegian ambassador said on Thursday that the ban on forex had resulted in inflated cost of stockfish in Nigeria. Stockfish, a popular delicacy in southern Nigeria, is costly due to ban on Forex for its importation, says, The ban is either for the safety of citizens in the country or due to their fixed exchange rate system or both. Countries that have restrictions on Retail Forex Trading. There are many countries where forex trading is legal but, they have some important restrictions on retail forex trading. Here are countries that have some important restrictions on forex trading:Estimated Reading Time: 7 mins
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