July 2021 MPC Decision - CBN maintain status-quo, blows the whistle on BDCs
| NIGERIA MONETARY POLICY COMMITTEE | |||||
| CBN maintain status-quo, blows the whistle on BDCs | |||||
| As largely anticipated, the Monetary Policy Committee (MPC) meeting ended on an accommodative note for the fifth consecutive time, as all benchmark rates were left unchanged - the Monetary Policy Rate (MPR) at 11.5%, the Cash Reserve Ratio (CRR) at 27.5%, and the Liquidity Ratio at 30.0%. | |||||
| CBN decides to call it quits on BDCs In what was the hallmark of the recent MPC meeting, the CBN Governor announced the apex bank’s decision to suspend the sales of foreign exchange to Bureau de Change (BDC) operators. This comes on the back of alleged excessive returns made by the BDCs in the discharge of their duties, which has contributed to rising inflation within the economy, in opposition to the Bank’s prime objective of price stability. While there has been astronomical growth in the number of BDCs over the years, the increased supply has had little impact on driving the Naira towards its fair value (CBN: ₦430-₦440/$). Thus, the Bank has decided to discontinue FX sales to BDCs and the licensing of new BDCs. |
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