experts regarding the CBN’s decision to cancel the issuance of forex to BDCs, with President of the Association of capital market Academics of Nigeria, Prof Uche Uwaleke, saying the move is in the right direction, although it may have certain repercussions on naira value.
“Exchange rate unification is in line with the IMF and World Bank’s recommendations and so improves the country’s profile and credit standing before International financial institutions. It signifies that the country is serious in her reform efforts,” he said.
“The move is likely to check round-tripping of forex and reduce the supply of forex in the parallel market,” the Capital Market Professor added. “Speculative demand for forex is also likely to reduce. I am aware that BDCs have been accused of being vehicles for bribery and corruption. This will likely be reduced.”
However, on the flip side, the move would wipeout the employment opportunities that were created by 5000 BDCs, in addition to those which are waiting to be licensed. “Also, the gap between the AFEX rates and parallel market rates is likely to widen further with dollar shortages in BDC and parallel market segment,” he said.
