Naira depreciation: Why CBN should be blamed - BDC operators

Bureau De Change operators have blamed the continued depreciation of the naira in the foreign exchange market on the Central Bank of Nigeria's insufficient allocation of foreign currency.

An official of the Association of Bureaux De Change in Nigeria who preferred anonymity disclosed this on Wednesday.

The official spoke against the fall of the naira against the dollar.

At the parallel market section, the naira dropped to N1,520 on Tuesday from N1,500 the previous day, according to Mistila Dayyabu, BDC operator in Wuse Zone 4 Abuja.

Similarly, FMDQ data showed that the naira closed at N1,520.40 per dollar on Tuesday from N1,478.11.

Giving insight on the naira's depreciation for the past weeks, the ABCON official said the volume of FX allocation to members was discouragingly low.

According to him, the paucity in FX allocation has pushed BDC operators to source the currency at a higher cost thereby resulting in the naira depreciation.

"The volume and frequency of dollar supplies from the CBN are discouragingly low. We often have to source dollars independently.

"We haven't received more than $30 to $40 million total in the last three months," he lamented, describing the pace of allocations as "snail-speed."

He criticized the government's handling of the situation, stating, "We often ignore fundamental economic issues in this country and chase after less relevant matters. Such strategies inevitably lead to errors.

"The volume and frequency of dollar supplies from the CBN are discouragingly low. We often have to source dollars independently.

"We haven't received more than $30 to $40 million in the last three months.

"We often ignore fundamental economic issues in this country and chase after less relevant matters. Such strategies inevitably lead to errors."

The development comes as the Economic and Financial Crimes Commission continued clampdown on FX speculators in Abuja, Lagos, Kano, and major cities.

From February to April 8, 2024, the apex bank distributed FX three times to BDCs.

However, the naira returned to depreciation in mid-April. During that period, it dropped by 28 per cent against the dollar.