CBN Sells $20,000 To BDCs At N1,580 As Naira Depreciation Persists

In its bid to increase liquidity in the foreign exchange market, the Central Bank of Nigeria (CBN) has offered to sell $20,000 to each eligible Bureau De Change (BDC) operator at a rate of N1,580 per dollar.

The apex bank made this known in a statement signed by W. J. Kanya, acting director of Trade & Exchange Department.

According to the statement, BDCs are authorised to sell to end-users at a margin not exceeding one per cent above the purchase rate from the CBN.

It further stated that eligible BDCs interested in the transaction are “directed to make the Naira payment to the CBN Deposit Account Numbers with them.”

The bank also instructed the BDCs to submit payment confirmation and all necessary documentation for disbursement at the appropriate CBN Branches in Abuja, Awka, Kano and Lagos for collection of the 20,000 United States Dollars.

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This move is part of the ongoing efforts to boost liquidity and stabilise the value of the naira in the foreign exchange market. By selling dollars to BDCs at a lower rate, the CBN aims to ensure adequate supply to meet the needs in the retail segment of the foreign exchange market, especially for transactions that do not involve importation.

To curb incidences of arbitrage, the apex bank mandated BDCs to sell to end-users at a margin not more than one per cent above the purchase price.

Prime Business Africa reports that the CBN had sold dollars to BDCs for four consecutive times earlier this year to increase FX liquidity at the retail segment of the market.

Last month, the apex bank also sold dollars to end-users through their banks that submitted bids.

Between Tuesday, 3 September and Thursday, 5 September, the naira recorded depreciation as the exchange rate rose to N1,639.41 as quoted on Thursday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to data from the FMDQ Securities Exchange Limited.

It however, strengthen to N1,593.32 on Friday, 6th September, gaining N46.09.