The Nigerian Central Bank has declared its intention to offer foreign exchange valued at $20,000 to all qualified Bureau De Change operators nationwide.
This occurs more than two years after Godwin Emefiele, the suspended former governor of the CBN, halted the selling of foreign currency to BDC operators in that particular forex market segment.
This was revealed by the top bank in a fresh circular that was released on Tuesday and bearing the signature of Hassan Mahmud, Director of the Trade and Exchange Department.
The goal of the action, according to the circular titled “Sale of Foreign Exchange to Bureau de Change Operators to Meet Retail Demand for Eligible Invisible Transactions,” was to close the growing exchange rate gap and address enduring distortions in Nigeria’s retail foreign exchange market.
According to the statement, the allotment will be sold for N1,301/$, which reflects the lower band rate of spot transactions that were completed at the Nigerian Autonomous Foreign Exchange Market as of the trading day prior, which was 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,” read the circular.
“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.”
Additionally, it instructed qualified BDCs to deposit Naira into the appropriate CBN Foreign Currency Deposit Naira Accounts and to provide proof of payment along with other required paperwork.
“All eligible BDCs are directed 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 at the appropriate CBN Branches ABUJA, AWKA, LAGOS and KANO,” it added.