The Central Bank of Nigeria (CBN) has approved the sale of foreign exchange (FX) to eligible Bureau de Change (BDC) operators at 1,450 naira to a dollar.CBN said the sum of $20,000 is to be sold to each BDC at the rate of N1,450/$ (representing the lower band of the trading rate at NAFEM in the previous trading day).
CBN als directed Bureau De Change (BDCs) operators to sell forex at a maximum profit margin of 1.5 per cent, aiming to correct market distortions.
In a statement on Thursday, CBN’s Acting Director in Charge of Trade and Exchange Departments, Aliyu Mahdi, said the apex bank has observed the continued distortions in the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.
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“Following the ongoing reforms in the foreign exchange market, to achieve an appropriate market determined exchange rate for the Naira, the Central Bank of Nigeria (CBN) has observed the continued distortions in the retail end of the market, which is feeding into the Parallel market and further widen the exchange rate premium,” the statement partly read.
“To this end, the CBN has approved the sales of FX to eligible Bureau De Change (BDCs) to meet the demand for invisible transactions.”
According to the apex bank, all BDC operators are allowed to sell to eligible end-users at a margin not more than 1.5 per cent above the purchase rate from CBN.
The financial regulator instructed all eligible BDCs to make naira payments to CBN’s naira deposit account numbers and submit confirmation of payment with other necessary documentation for disbursement at its branches in Abuja, Akwa, Kano and Lagos.
Profit Cap
The Central Bank of Nigeria(CBN) on Thursday directed Bureau De Change (BDCs) operators to sell forex at a maximum profit margin of 1.5 per cent, aiming to correct market distortions.
The circular with the title, “Sales of Foreign Exchange To BDCS To Meet Retail Market Demand For Eligible Invisible Transactions”, outlined the rationale behind the directive.
The regulator said that persistent distortions in the retail market were contributing to disparities in exchange rates, particularly in the parallel market.
“To address this issue, the CBN has authorised the sale of FX to eligible Bureau De Change (BDCs) to satisfy demands for invisible transactions,” it stated.
Under the directive, each BDC is authorised to purchase 20,000 dollars at a rate of N1,450 per dollar reflecting the lower band of the trading rate observed in the previous session at NAFEM (Nigeria Autonomous Foreign Exchange Market).
“All BDCs are permitted to sell to eligible end-users at a profit margin not exceeding one point five per cent (1.5%) above the CBN purchase rate,” the bank clarified.
The apex bank instructed eligible BDCs to remit Naira payments to specified CBN Naira Deposit Account Numbers and submit payment confirmations alongside required documentation for disbursement at designated CBN branches in Abuja, Awka, Kano and Lagos.
