After nearly three years of suspension from the official forex window, the Central Bank of Nigeria (CBN) yesterday resumed daily $20,000 forex sale to Bureaux de Change (BDCs).
Up to 785 BDCs are eligible for the transactions and will access $20,000 each, bringing the daily sales to $15.7 million.
The policy shift, announced by the Director of Trade & Exchange Department, Dr. Hassan Mahmud, is expected to curb persisting distortions in the retail segment of Nigeria’s foreign exchange market by deepening dollar liquidity.
Eligible BDCs are mandated to deposit their Naira payments into designated CBN Foreign Currency Deposit Naira Accounts.
They must also confirm payment along with other documentation to facilitate disbursement at the appropriate CBN branches located in Abuja, Awka, Lagos, and Kano.
The number of eligible BDCs dropped from over 4,500 to the current number following the apex bank audit of members, assessment of operational digitisation and rendition of returns.
This initiative is part of the broader efforts to achieve a market-driven exchange rate for the Naira and alleviate the pressures feeding into the parallel market.
This allocation will be sold at a rate of N1,301/$, reflecting the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market (NAFEM) as of the previous trading day, dated February 27, 2024.
This strategy is anticipated to inject much-needed liquidity into the market and stabilise the Naira’s value.
The circular stipulates that all BDCs are permitted to sell foreign exchange to end-users at a margin not exceeding one per cent above their purchase rate from the CBN.
This measure is intended to prevent excessive mark-ups and protect consumers from price exploitation.
The circular reads: “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 at today, 27th February 2024).”
