Market News
Nigeria's central bank resumes sale of dollars to Bureau de Change operators - BUSINESS INSIDER
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After taking a break for three years, the Central Bank of Nigeria (CBN) has reinstated dollar sales to Bureau De Change (BDC) operators as part of efforts to achieve an appropriate market-driven exchange rate for the Naira and alleviate the pressures contributing to the parallel market.
On July 27, 2021, under the leadership of Godwin Emefiele, the former governor, the CBN discontinued the sale of foreign exchange to BDCs. The decision was based on accusations that BDCs were engaging in wholesale FX trading exceeding USD 5000, a violation of their licenses and Nigeria's FX regulations.
According to a circular released on Tuesday, the CBN will now provide each BDC with $20,000 weekly at a rate of N1,301 per dollar. The BDCs are permitted to sell to end-users with a margin not exceeding one per cent above the purchase rate from the CBN.
The apex bank said it has observed the continuous price distortions at the retail end of the market, which is feeding into the parallel market end further widening the exchange rate premium.
What the CBN said:
“The CBN has approved the sale of foreign exchange to eligible Bureau De Change (BDCs) 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 eligible BDCs are instructed to make Naira payments to the designated CBN foreign currency deposit Naira accounts. After making the payment, they need to submit confirmation along with other necessary documentation for disbursement at the appropriate CBN Branches – Abuja, Awka, Lagos, and Kano.
