Bureaux De Change Operators Shuts Down Operation Centers

Bureau De Change (BDC) operators in Abuja have shut down operations amidst concerns over significant depreciation in the value of the naira against the United States dollar.

According to report, several BDC shops at the Wuse Zone 4 axis of Abuja were under lock and key as the usually busy streets were deserted.

“We have been asked to shut down operations as the dollar price keeps going up. We are trying to control the rate,” said Aliyu Wireless, a BDC operator at zone 4 in Abuja.

In the course of the engagement with the dealer, motorists trying to stop around the Zone 4 premises were prevented from doing so.

While some currency traders who attempted to boycott the order were asked to desist, some defaulters were led away by security operatives who took positions at strategic locations of the Zone 4 market.

“We’ll lock this car. No parking, no buying, and no selling today,” Mr Aliyu was heard saying to potential customers lurking around.

Bureaux De Change Operators Shuts Down Operation Centers

Similarly, another currency dealer who gave his name as Shinkafi, said they had been warned not to engage in trade due to the rising exchange rates in the country.

“Wallahi we have been asked by the Union not to trade. As you can see people are not coming, I don’t know if they will later allow us to sell,” Shinkafi said in an interview.

It was gathered that the enforcement of the directive by the street market currency vendors came about 24 hours after the BDC association’s Chairman, Abdulahi Dauran, announced Wednesday that its members will be shutting down operations to curb the unprecedented depreciation of the naira against the dollar.

Meanwhile, recall that Nigeria’s naira recorded massive depreciation against the dollar amid scarcity of the greenback.

This week, the naira plunged to an all-time low across both the official and unofficial segments of the currency markets, mounting pressure on the country’s fiscal and monetary authorities.

On Tuesday, naira closed at an all-time low of N1,482 against the United States dollar on the authorised market. It eventually recovered slightly on Wednesday after the local currency closed at N1,455/$1 on the spot market, data published on the FMDQ website showed.

However, the currency crossed the N1,500 and above mark at the parallel market on Wednesday raising concerns over the effectiveness of the CBN’s policy intervention.

Amidst this, the CBN in a new circular issued Wednesday ordered Deposit Money Banks to sell their excess dollar stock by February 1.

“The Central Bank of Nigeria (CBN) has noted with concern the growth in foreign currency exposures of banks through their Net Open Position (NOP),” the CBN said.

This, the bank said, has created an incentive for banks to hold excess long foreign currency positions, which exposes banks to foreign exchange and other risks.

The CBN issued prudential requirements to banks to ensure that these risks are well managed and avoid losses that could pose systemic challenges.

As part of its new directives, the CBN ordered banks that their Net Open Position (NOP) limit of the overall foreign currency assets and liabilities taking into cognizance both those on and off-balance sheet should not exceed 20 per cent short or 0 per cent long of shareholders’ funds unimpaired by losses using the Gross Aggregate Method.

“Banks whose current NOP exceeds 20% short and 0% long of their shareholders’ funds unimpaired by losses are required to bring them to the prudential limit by February 1, 2024,” the CBN said in its circular.

It also mandated banks to compute their daily and monthly NOP and Foreign Currency Trading Position (FCTP) using templates attached to the notice.