In a recent development, the Central Bank of Nigeria (CBN) has announced its decision to resume the sale of foreign exchange, with each eligible Bureau De Change (BDC) operator set to receive $20,000 across the country.
This decision marks a significant shift more than two years after the former CBN governor, Godwin Emefiele, suspended the sale of foreign exchange to BDC operators in that segment of the forex market.
The announcement was conveyed in a circular issued by Hassan Mahmud, the Director of the Trade and Exchange Department at the CBN.
Titled “Sale of Foreign Exchange to Bureau de Change Operators to meet retail demand for eligible invisible transactions,” the circular aims to rectify distortions in Nigeria’s foreign exchange market’s retail segment and narrow the widening gap in the exchange rate.
The allocated foreign exchange will be sold at a rate of N1,301/$, reflecting the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market as of the previous trading day, dated February 27, 2024.
In the circular, the CBN stated, “To this end, the CBN has approved the sale of foreign exchange to eligible Bureau De Change to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,301/$.”
The directive allows BDCs to sell to end-users at a margin not exceeding one per cent (1 per cent) above the purchase rate from CBN. Eligible BDCs are instructed to make Naira payments to the designated CBN Foreign Currency Deposit Naira Accounts and submit necessary documentation for disbursement at specific CBN branches in Abuja, Awka, Lagos, and Kano.
The CBN’s recent actions are part of ongoing reforms to stabilize the Naira and address distortions in the foreign exchange market, including efforts to clear FX backlog, limit forex for foreign education and medical tourism, increase BDCs’ minimum share capital, and curb forex speculators.
Further details are expected to be released later.
