CBN to sell forex to BDCs at N1450/$

The Central Bank of Nigeria (CBN) has announced the approval of the sales of Forex to eligible Bureau De Change (BDCs) operators to meet the demand for invisible transactions in a move to strengthen the nation’s currency, the naira.

In a circular signed by A. A Mahdi, the Acting Director, Trade and Exchange Department, CBN, the bank said that the sum of $20,000 is to be sold to each BDC at the rate of N1,450/$1. This rate represents the lower band of the trading rate at the Nigerian Autonomous Foreign Exchange Market (NAFEM) from the previous trading day.

These sales come at a time when the naira faces constant pressure, inching toward the N1,600/$1 ceiling.

The new measure expected to meet the demand for invisible transactions and curb the widening exchange rate premium observed in the parallel market.

To address these distortions and ensure a more stable exchange rate, the CBN’s approval allows BDCs to sell Forex to eligible end-users with a margin not exceeding 1.5 per cent above the purchase rate from the CBN.

The CBN circular reads, “Following the on-going reforms in the foreign exchange market, with the objective of achieving an appropriate market determined exchange rate for the Naira, the Central Bank of Nigeria (CBN) has observed the continued distortions in the retail end of the market, which is feeding into the Parallel market and further widen the exchange rate premium.

“To this end, the CBN has approved the sales of Forex to eligible Bureau De Change (BDCs) to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,450/$ (representing the lower band of the trading rate at NAFEM in the previous trading day.

All BDCs are allowed to sell to eligible end-users at a margin not more than 1.5 per cent above the purchase rate from CBN.

“All eligible BDCs are directed to make the Naira payment to the listed CBN Naira Deposit Account Numbers and submit confirmation of payment with other necessary documentation for disbursement at the appropriate CBN Branches – (ABUJA, AWKA, KANO, and LAGOS)”