Victor EzejaAs part of efforts to strengthen the value of the naira, the Central Bank of Nigeria (CBN) has once again begun providing foreign exchange to eligible Bureau de Change (BDCs) operators as a way of increasing liquidity in the forex market.
The measure is also aimed at curbing the activities of dishonest merchants who manipulate the system for their selfish gains.
According to a statement signed by the CBN Director of Trade and Exchange Department, Dr Hassan Haruna, released on Tuesday, the apex bank will sell the sum of $20,000 to BDC operators at the rate of N1,301/$.
This is coming more than two years after the suspended former CBN governor, Godwin Emefiele, stopped the sales of foreign exchange to BDC operators in that segment of the forex market.
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It said BDC operators were allowed to sell to end-users with not more than 1 per cent above the purchase rate from the CBN.
The statement said: “Following the on-going reforms in the foreign exchange market, aimed at achieving an appropriate market-determined exchange rate for the Naira, the Central Bank of Nigeria (CBN) 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.
CBN Approval of Dollar Sales to BDCs
“To this end, the CBN has approved the sale of foreign exchange to eligible Bureau De Change (BDCs) to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,301/$- (representing the lower band rate of executed spot transactions at NAFEM for the previous trading day, as at today, 27th February 2024).”
“All eligible BDCs are directed to make the Naira payment to the designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment, with other necessary documentations, for disbursement at the appropriate CBN Branches – ABUJA, AWKA, LAGOS and KANO).”
The bank urged BDC operators to be guided appropriately in making the transactions.
The apex bank has continued to introduce policy measures to stabilize the exchange rate which has been fluctuating since the naira was floated in the foreign exchange market in June last year.
On Friday, the bank had also issued a revised guideline for BDC operations in Nigeria to ensure that their activities do not impact the value of the local naira.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
