CBN drops BDC operators in $123m sale

Bureau De Change Operators were excluded in the latest tranche of forex sales by the Central Bank of Nigeria to authorised dealers.

This was disclosed by the President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadebe, in an interview with The PUNCH.

He said only banks got the forex intervention.

Responding in a chat, the BDC president said, “No, it is their usual intervention at the NAFEM window which presently excludes the BDCs but only banks.”

The apex bank had commenced sales of forex worth $122.67m to 46 approved dealers as part of significant step to stabilize the foreign exchange market.

Authorised dealers include banks and BDC operators.

Last Friday, a statement signed by the CBN Director in charge of Financial Markets, Dr Omolara Duke, said the new release is part of the bank’s determination to promote stability and reduce market volatility in the foreign exchange market.

The statement read in part, “The Central Bank of Nigeria has sold the sum of $122,671,000 to 46 authorised dealers in its determination to promote stability and reduce market volatility in the foreign exchange market.”

Last month, the President Association of Bureau De Change Operators of Nigeria, Aminu Gwadebe, told The PUNCH that the apex bank had suspended supply to the BDCs since March and was moving towards a complete liberalisation of the foreign currency market, which would not require its intervention.

He said, “The BDC window has been suspended by the Central Bank of Nigeria since around March or so. The last time we were funded I think was around March.”

This forex sales break allowed the naira to depreciate further to N1554/$ at the official market on Thursday.

Earlier this week, Nigeria’s external reserves increased yet again, reaching $35.05 billion as of July 8, 2024.

This is the first time it crossed the $35 billion ceiling under the administration of President Bola Tinubu.

According to the statement, the sales were made on Wednesday and Thursday this week.

On Wednesday, the apex bank sold $67.5 million to 27 authorized dealers, while purchasing $2.5 million from one authorized dealer.

The bid range for these transactions was between N1,480/$1 and N1,500/$1. Payments for these transactions are scheduled for July 12, 2024, following a two-day settlement cycle (T+2).

Also, on Thursday, the CBN sold $55.17 million to 19 authorized dealers at a rate of N1,540.0/$1.

No foreign exchange was purchased on this date. The payments for these spot sales are due on July 15, 2024.

The CBN further urged all authorized dealers to ensure that foreign exchange purchases from the bank are exclusively used for trade-backed transactions, which must be reported within 72 hours.

The statement noted that the CBN supplies foreign exchange to the market through FX spot sales to authorized dealers using two-way quotes, aiming to improve liquidity.