The Central Bank of Nigeria (CBN), on Tuesday announced that it has approved the sale of Foreign Exchange (FX) to eligible Bureau De Change (BDC) operators to meet their demand for invisible transactions.
The central bank disclosed that the sum of $20,000 would be sold to each BDC at the rate of N1,301/S which represents the lower band rate of executed spot transactions at the Nigeria Autonomous Foreign
Exchange Market (NAFEM) for the previous trading day, as of February 27, 2024.
The apex bank conveyed the development in a circular dated February 27, 2024, and issued by CBN Director, Trade and Exchange Department, Dr. Hassan Mahmud, which was addressed to all BDC operators and the public.
The CBN explained that the intervention became necessary following 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.
The move also complements ongoing reforms in the foreign exchange market, aimed at achieving an appropriate market-determined exchange rate for the Naira.
The CBN however, emphasised that the BDCs are allowed to sell to end-users at a margin not more than one percent above the purchase rate from the central bank.
The bank further directed 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 at the appropriate CBN branches in Abuja, Awka, Lagos, and Kano.
Similarly, the apex bank also published an updated list of 1,368 BDCs currently licensed to operate in the country.
The list obtained by THISDAY showed that 785 are domiciled in Lagos, 371 in Kano, 186 in Abuja, and 26 in Akwa.
Total CBN weekly intervention to this figure would amount to $27.36 million and about $328 million annually.
The development further confirmed THISDAY’s earlier report that the central bank planned to resume its FX intervention through the BDC operators, in a bid to achieve its mandate of safeguarding the value of the local currency, ensuring financial system stability, and shoring up external reserves.
James Emejo and Nume Ekeghe
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