Reports says the Central Bank of Nigeria has announced its plan to sell foreign exchange worth $20,000 to each eligible Bureau De Change operator across the country.
The Apex bank revealed this in a new circular issued by the Director, Trade and Exchange Department, Hassan Mahmud, on Tuesday 27 February 2024.
This development is coming more than two years after the suspended former CBN governor, Godwin Emefiele, halted the sales of foreign exchange to BDC operators in that segment of the forex market.
Meanwhile the circular which is tagged, “Sale of Foreign Exchange to Bureau de Change Operators to meet retail demand for eligible invisible transactions” noted that the move is geared towards rectifying the persisting distortions in the retail segment of Nigeria’s foreign exchange market and bridging the widening gap in the exchange rate.
It said that the allocation will be sold at a rate of N1,301/$, 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.
“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.” The circular added.
The CBN further directed eligible BDCs to make Naira payments to the designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment, with other required documentation.
It emphasized that appropriate CBN Branches in ABUJA, AWKA, LAGOS and KANO would be attending to all eligible BDCs 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.
Accordingly, among other moves to address the problem of exchange rate, the CBN in frantic efforts to save the free fall of the naira has rolled out a number of significant reforms towards addressing Naira depreciation, such as probing and clearing FX backlog, limiting forex for foreign education and medical tourism, increasing BDCs’ minimum share capital, and curbing FX speculators.
Details shortly…
