Nigeria’s central bank on Friday revised the rules for operating retail bureaux de change in a bid to tighten regulation to curb speculation after the long slide in oil prices hit its dollar reserves and currency.
The naira was trading at a new low of 260 to the dollar among most retail money exchange operators on Friday as against 255 on Thursday. On the official interbank market, it traded at 199 at 1227 GMT, close to a rate at which it has been pegged since February.
The circular, which will come into effect in January in Africa’s biggest economy, orders retail money exchanges to deposit a mandatory cautionary deposit of 35 million naira in an account with the central bank, in addition to a minimum capital requirement of 35 million naira.
The central bank has been struggling to shore up its naira currency hard hit by the plunge in oil prices, Nigeria’s main export, which started late last year. The new guideline is the latest measure which has cramped dollar demand and the banking sector.
The banking regulator restricted bureaux de change agents to one branch operations, whose license will be renewed yearly and gave those operating with branches 90 days to close them.
The central bank said bureaux de change agents, which account for less than five percent of total dollar trades in Nigeria, can obtain dollars from private sources including its window to fund travel allowance of up to $5,000.
But it added that individuals wishing to sell more than $10,000 shall be required to disclose their source.
Nigeria’s dollar reserves shed 1.1 percent in a week to $29.59 billion as of Dec. 7, according to the central bank.
This week the regulator cut dollar supplies to bureaux de change operators due to incomplete documentation. It sold $30.5 million to some bureaux de change agents on Wednesday, lower than $84.5 million it offered two weeks ago. It also excluded several others from the weekly sale.