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“Deposit Money Banks are grappling with a shortage of dollars following a reduction in their foreign exchange allocations by the Central Bank of Nigeria (CBN), according to sources.

Numerous bank officials revealed that they have been struggling to meet their customers’ demands for foreign exchange, particularly for expenses like school fees and Personal Travel Allowance.

The disparity between demand and supply has worsened. We’re hoping that the CBN will step in and provide more forex in the near future,” commented a high-ranking official from a tier-1 bank.

“We’ve been experiencing delays and, for some weeks now, we haven’t received any allocation,” noted another bank official.

Additional sources from various banks confirmed to The PUNCH that the CBN has significantly reduced their allocations of foreign exchange.

On Monday, the CBN announced its intention to implement measures to curb the decline of the naira’s value. In response to this, the naira experienced an upturn in the parallel market on Tuesday, after the central bank’s statement that it would intervene to counteract the continued devaluation of the local currency.

While addressing President Bola Tinubu after updating him on the CBN’s efforts to halt the decline of the naira, the Acting Governor of the CBN, Folashodun Shonubi, highlighted that the fluctuations in the parallel market were influenced not solely by economic factors but also by speculative demand.

However, according to some Bureau de Change Operators who spoke to The PUNCH, the naira, which had been exchanged at a rate of 956/$ on Monday, increased to 925/$ on Tuesday.”

A Bureau de Change (BDC) operator named Alh Alli Kareem stated, “Today, we purchased and sold the naira at 915/$ and 925/$. They have mentioned that they will inject more dollars into the economy, but we are still waiting.”

In the Investors & Exporters window, naira trading began at 785.89/$, rose to a peak of 799.90/$, and eventually closed at 774.77/$ on Tuesday. This was a contrast to the closing rate of 764.68/$ recorded on Monday.

Dr. Sam Nzekwe, a former President of the Association of National Accountants of Nigeria, suggested that the CBN’s announced intervention might only offer short-term relief and may not be sustainable. He noted that people have lost confidence in the naira, leading them to purchase dollars and hold onto them due to uncertainty. Nzekwe emphasized that productive economic activities need to be promoted for a lasting solution.

Recalling events from July 2021, the CBN stopped dollar allocation to BDCs but continued the practice through Deposit Money Banks.

Meanwhile, sources have indicated that the Federal Government might take action against Bureau de Change operators in the coming weeks, with the Economic and Financial Crimes Commission (EFCC) targeting currency speculators who have contributed to the strain on the local currency.

“The government plans to crack down on Bureau de Change operators nationwide. While they engage in business, their role in the problem lies in their profit-driven manipulation of exchange rates. The current rates are not market-driven but speculative, prompting government intervention,” a source shared.

As of now, the EFCC has not verified this plan.