The Central Bank of Nigeria (CBN) has announced its decision on Tuesday, February 27, 2024, to resume the sale of foreign exchange to eligible Bureau De Change (BDC) operators across the country.
This decision marks a significant shift more than two years after the suspended former CBN governor, Godwin Emefiele, halted the sales of foreign exchange to BDC operators in that segment of the forex market.
The apex bank revealed this in a recent circular issued and signed by the Director of the Trade and Exchange Department, Hassan Mahmud.
Titled “Sale of Foreign Exchange to Bureau de Change Operators to meet retail demand for eligible invisible transactions,” the circular aims to address persisting distortions in the retail segment of Nigeria’s foreign exchange market and bridge the widening gap in the exchange rate.
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According to the circular, each eligible BDC will be allocated foreign exchange worth $20,000, to be sold at a rate of N1,301/$.
This rate reflects 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.
The CBN emphasized that the move is part of ongoing reforms in the foreign exchange market to achieve an appropriate market-determined exchange rate for the Naira.
It highlighted the need to rectify price distortions at the retail end of the market, which contribute to widening the exchange rate premium and feeding into the parallel market.
Furthermore, the circular instructed eligible BDCs to make Naira payments to designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment along with other necessary documentation for disbursement at the appropriate CBN branches in Abuja, Awka, Lagos, and Kano.
The CBN has been undertaking various measures in frantic efforts to stabilize the free fall of the naira, including probing and clearing FX backlog, limiting forex for foreign education and medical tourism, increasing BDCs’ minimum share capital, and curbing FX speculators, among others.
Further details are to follow.
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