CBN approves forex sales to BDCs at N1,590/$

The Central Bank of Nigeria has announced its decision to sell foreign exchange worth $20,000 to eligible Bureau De Change operator across the country.

This was disclosed by the apex bank in a statement signed by the Acting Director of Trade and Exchange Department, Dr W. J Kanya, on Wednesday.

It said the sales will help operators meet retail market demand for eligible invisible transactions.

The latest intervention of the central bank comes hours after the Nigerian naira dropped in value against the dollar to N1,658.48 in the Nigerian Autonomous Foreign Exchange on Tuesday.

At the parallel market, bureau de change operators sold at the rate of 1670/dollar.

The statement read, “This is to inform the Bureau De Change Operators and the general public that the CBN will be providing additional liquidity to this segment of the foreign exchange market.

“To this end, the CBN has approved the sale of US$20,000.00 to each eligible BDC at the rate of N1,590/$. This is to meet the demand for invisible transactions.”

The CBN,however, warned that operators must not sell above one percent of the purchase rate.

This means that the BDCs cannot make more than N15.59 profit on each dollar they sell to their customers.

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

“All BDCs are allowed to sell to eligible end-users at a margin of NOT MORE THAN one percent above the purchase rate from CBN.

“Eligible BDCs interested in this transaction are directed to make the Naira payment to the CBN Deposit Account Numbers with them.

“Also, payment confirmation and all necessary documentation for disbursement are to be submitted at the appropriate CBN branches (Abuja, Awka, Kano, and Lagos) for collection of the $20,000.00. Please be guided accordingly,” the statement concluded.

This is the seventh attempt by the CBN to sell FX to BDCS after a prolonged period of suspension by the central bank in 2021. The ban was lifted earlier in the year following the revocation of licenses of over 4173 BDC operators in February.

With 1,583 approved BDC operators, about $31.66m may be injected into the retail end of the market during these sales.

Meanwhile, the naira dropped further by N9 or 0.53 per cent to N1667.42 after trading activities at NAFEM on Wednesday. This figure is from N1,658 it recorded on Tuesday.