CENTRAL BANK OF NIGERIA (CBN)
The Central Bank of Nigeria has declared that it will provide eligible Bureau De Change operators nationwide with foreign exchange valued at $20,000 each.
This decision marks a reversal from the policy implemented over two years ago by former CBN governor, Godwin Emefiele, which halted the sale of foreign exchange to BDC operators.
In a recent circular dated Tuesday, Feb. 27, the Central Bank made public its decision, as conveyed by Hassan Mahmud, Director of the Trade and Exchange Department, regarding the sale of foreign exchange to Bureau de Change operators to fulfill retail demands for eligible invisible transactions.
The circular is titled “Sale of Foreign Exchange to Bureau de Change Operators to Meet Retail Demand for Eligible Invisible Transactions.”
In light of ongoing reforms aimed at establishing a market-determined exchange rate for the Naira, the Central Bank of Nigeria has identified persistent price distortions at the retail level, contributing to disparities in exchange rates and widening the premium in the parallel market.
Consequently, the CBN has authorized the sale of foreign exchange to eligible Bureau De Change operators to address demand for invisible transactions.
Each BDC will be allotted $20,000 at the rate of N1,301/$ (reflecting the lower band rate of spot transactions executed at NAFEM on the preceding trading day, as of February 27, 2024).
Eligible Bureau De Change operators are instructed to adhere to a maximum margin of one percent above the purchase rate from the CBN when selling to end-users.
Additionally, they are directed to make Naira payments to designated CBN Foreign Currency Deposit Naira Accounts and provide confirmation of payment along with required documentation for disbursement at the appropriate CBN branches in Abuja, Awka, Lagos, and Kano.
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