Just in : CBN commences sales of dollars to BDCs
The Central Bank of Nigeria, CBN has declared that it will be selling foreign exchange valued at $20,000 to all qualifying Bureau De Change operators nationwide.
This initiative is a component of larger attempts by the apex bank to stabilise the Naira’s exchange rate and reduce the forces that fuel the black market.
This was made public by the top bank in a fresh circular that was signed on Tuesday by Hassan Mahmud, the director of the trade and exchange department.
The circular titled, “Sale of Foreign Exchange to Bureau de Change Operators to meet retail demand for eligible invisible transactions” said the move aimed at rectifying the persisting distortions in the retail segment of Nigeria’s foreign exchange market and bridging the widening gap in the exchange rate.
It said the allocation will be sold at a rate of N1,301/$, reflecting the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market as of the previous trading day, dated February 27, 2024.
The circular read, “Following the ongoing reforms in the foreign exchange market, aimed at achieving an appropriate market-determined exchange rate for the Naira, the Central Bank of Nigeria has observed the continued price distortions at the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.
“To this end, the CBN has approved the sale of foreign exchange to eligible Bureau De Change to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,301/$- (representing the lower band rate of executed spot transactions at NAFEM for the previous trading day, as of today, 27th February 2024).
“All BDCs are allowed to sell to end-users at a margin NOT MORE THAN one per cent (1 per cent) above the purchase rate from CBN.”
It additionally instructed qualified BDCs to deposit Naira into the appropriate CBN Foreign Currency Deposit Naira Accounts and to provide proof of payment along with other required paperwork.
“All eligible BDCs are directed to make the Naira payment to the designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment, with other necessary documentation, for disbursement at the appropriate CBN Branches ABUJA, AWKA, LAGOS and KANO,” it added.