Thread by @FinLitAfrica

The Central Bank of Nigeria has Announced a New FX Policy.

(Aka how to access dollars)

Here’s why you should care👇

The Policy says that:

1. CBN would stop selling FX to Bureau de Change (BDCs) operators, aka the guy that sells dollars on the street.

2. CBN would also no longer issue new license to BDCs.

3. FX would now be channeled through commercial banks.

4. Banks would set up a desk to serve customers in need of FX

In layman terms, this means that

1. You’d no longer be able to buy dollars from your favorite dealer.

2. You’d now have to go to the banks and present all necessary documents before you can buy dollars.

3. IF the policy is upheld, BDC operators MIGHT go out of business

Other possible effects of this policy are:

1. Immediate spike in the price of dollar due to the stringent process now required to access dollars.

2. Increase in alternative sources for FX that bypass banks, probably peer-to-peer transactions.

3. Possible increase in inflation rate due to hike in prices of imported goods.

The good news however is that for people with assets/investments in dollars, an increase in the price of dollar is great, as the Naira value of your assets would increase.

So while CBN and the Nigerian Government are doing their own thing, ensure that you are protecting your bag by investing in assets that are independent of the Naira.

#CBN
#FXPolicy