CBN Resumes Forex Sales To BDCs

The Central Bank of Nigeria (CBN) began dollar sales to Bureaux De Change (BDC) operators on Thursday, July 18, with a $20,000 payout to each licensee.

The central bank stated that the currency injection is intended to reduce FX distortions, increase market liquidity, and stable the naira.

In a circular to all BDC operators and the public, the CBN said it “observed the continued distortions in the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.”

The circular was signed by Aliyu Mahdi, the bank’s Acting Director of Trade and Exchange Department.

The apex bank stated that eligible BDCs will be able to purchase up to $20,000 at a fixed rate of N1,450 to the dollar.

The rate is based on the lower band of the previous day’s trading rate on the Nigerian Autonomous Foreign Exchange (NAFEX) window.

BDCs may sell dollars to authorised end users at a margin of up to 1.5 percent above the CBN’s purchasing rate.

To ensure compliance, BDCs must deposit Naira into designated CBN accounts and submit the relevant documentation for disbursement at specific branches in Abuja, Lagos, Kano, and Awka, Anambra State.

The CBN ascribed the decision to the growing disparity between official and parallel market exchange rates, which it blamed on inefficiencies in the retail market.

The bank expressed hope that the decision will assist to relieve pressure on the naira. Aminu Gwadabe, President of the Association of Bureaux de Change Operators of Nigeria (ABCON), stated that the additional dollar injections in the market will increase liquidity and stabilise the naira.

He noted that the decision has already had a favourable influence on the Naira, which rose from N1,640/$ to N1,570/$ in the parallel market.

A Gentle Reminder: Every obstacle is a stepping stone, every morning; a chance to go again, and those little steps take you closer to your dream.

Nnamdi Okoli