As Reported by The Punch, The Central Bank of Nigeria (CBN) has declared its intention to provide eligible Bureau De Change (BDC) operators across the country with foreign exchange amounting to $20,000 each. This decision comes after a hiatus of more than two years, during which the former CBN governor, Godwin Emefiele, halted the sale of foreign exchange to BDC operators in that segment of the forex market. ..….CONTINUE READING>>>>>>
The announcement was made through a recent circular issued by the CBN’s Director of Trade and Exchange Department, Hassan Mahmud. Titled “Sale of Foreign Exchange to Bureau de Change Operators to Meet Retail Demand for Eligible Invisible Transactions,” the circular aims to address ongoing distortions in Nigeria’s foreign exchange market and narrow the widening gap in the exchange rate.
The circular states that the allocated foreign exchange will be sold at N1,301/$, 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’s words, “Following the ongoing reforms in the foreign exchange market, aimed at achieving an appropriate market-determined exchange rate for the Naira, the Central Bank of Nigeria has observed the continued price distortions at the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.”
It further specifies that BDCs are permitted to sell to end-users at a margin not exceeding one per cent above the purchase rate from CBN. Eligible BDCs are instructed to make Naira payments to designated CBN Foreign Currency Deposit Naira Accounts and provide payment confirmation with other necessary documentation at specific CBN branches in Abuja, Awka, Lagos, and Kano.
The CBN has been implementing various reforms to stabilize the Naira, including probing and clearing the FX backlog, limiting forex for foreign education and medical tourism, increasing BDCs’ minimum share capital, and curbing FX speculators.….CONTINUE READING>>>>>>
