CBN Excludes BDC Operators From Latest $123m Forex Sales

The Central Bank of Nigeria (CBN) has excluded Bureau De Change Operators (BDCs) from its latest tranche of forex sales to authorised dealers.

The President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadebe stated this in an interview with The Punch, disclosing that only banks received the forex intervention.

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 a significant step to stabilise the foreign exchange market and the authorised dealers include banks and BDC operators.

A last week statement signed by the CBN’s 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, Gwadebe told newsmen 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 last 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 authorised 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 authorised dealers using two-way quotes, aiming to improve liquidity.