The decision will halt the supply of $5.72 billion annually by the central bank to the West African nation’s bureaus de change — a key source of foreign exchange for Nigerians traveling abroad and local businesses.
The central bank will also stop issuing new licenses to currency-trading companies, whose number more than doubled to almost 5,500 over the past five years, Governor Godwin Emefiele said at a briefing Tuesday.
The measure may lead to an initial depreciation in the naira’s value as the sudden withdrawal of supply from the central bank causes the price of dollars to increase.
The central bank took the step because some bureaus de change have become “greedy” chasing higher profits and their demand for foreign currency is bringing pressure to bear on the naira and the nation’s reserves, Emefiele said.
The central bank will only supply dollars through commercial lenders from now on, he said. The measure is the latest step by Emefiele to support the naira, which the central bank has devalued three times since March 2020 as lower oil income eroded the nation’s reserves.
