Naira Records Massive Gain at Official Market as CBN Withdraws Operating License of Over 2,000 Forex Dealers
- The Central Bank of Nigeria has decided to trim the list of Bureau de Change (BDC) dealers approved in the country
- More than 2,000 BDCs operators lost their licenses as CBN continues its fight to make the naira stronger again
- Within 16 years, the number of BDCs grew by more than 5,000, with most of them registered under the former CBN Governor Godwin Emefiele
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The Central Bank of Nigeria (CBN) has released an updated list of approved Bureau De Change (BDC) operators in the country.
The apex bank, in a document titled, Approved BDCs, published on its website on Tuesday, July 18, 2023, revealed that the licenses of 2,698 BDCs have been withdrawn.
Source: Getty Images
Legit.ng observed that the total number of BDC dealers approved to operate in the country is 2,991 from over 5,000.
CBN exchange rate fight
Since President Bola Ahmed Tinubu assumed office, the CBN has embarked on several exchange rate reforms, most notably the floating of the naira. This is to strengthen the Nigerian currency, which has failed to yield results so far.
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Over the last few years, BDCs (Bureau De Change) have become major influencers of the naira's exchange rates against foreign currencies, as the number of operators rose from just 74 in 2005 to 5,689 in 2021.
The vast number of players has created market distortion, leaving the CBN with little influence in tackling the devaluation of the Naira.
Tinubu's new economic advisers recently released a document titled ‘Policy Advisory Council Report: National Economy Sub-committee,’ which asked for implementing key reforms, including raising the capitalisation for BDC operators.
Another suggestion by the committee was for the CBN to allow Nigerian banks to operate as the primary dealers to supply the forex market.
Naira records massive gain
The Nigerian currency recorded a massive gain at the official foreign exchange market on Tuesday, July 18, 2023.
According to data obtained from FMDQ, the Nigerian currency closed on Tuesday at N742.93 per dollar.
This marks a massive 6.58% gain compared to Monday's N795.28 per dollar exchange rate.
A report says the recovery recorded on Tuesday is the biggest daily gain in over four years at the official market.
Aliko Dangote loses over N1.4trn in hours after CBN naira decision
Meanwhile, in another report, Nigerian billionaire Aliko Dangote's wealth has experienced a significant decline of N1.4 trillion following the devaluation of the naira.
The devaluation was triggered by CBN's move to unify the country's multiple exchange rate system.
Most of Dangote's investments, which are linked to his wealth, are based in Nigeria, and the performance of the naira directly affects his wealth.
Source: Legit.ng
