The Central Bank of Nigeria announced that it will provide $10,000 to each Bureau de Change operator at a rate of N1,251/$.
This was enclosed in a circular signed by Dr. Hassan Mahmud, the Director of the Trade and Exchange Department at the bank, and made available to Allub Times on Monday.
The central bank instructed each BDC to sell the dollars to eligible customers at a rate not exceeding 1.5% above the purchase price, meaning that BDCs should not sell above N1,269/$1.
On July 27, 2021, the CBN stopped selling foreign exchange to BDCs due to allegations of trading FX in amounts exceeding $5,000, which goes against their licenses and Nigeria’s FX regulations.
In February, CBN announced that it will be selling $20,000 worth of foreign exchange to each eligible Bureau de Change operator in the country.
This decision comes after more than two years since the former CBN Governor, Godwin Emefiele, suspended the sales of foreign exchange to BDC operators.
On Monday, the naira continued to strengthen against the United States dollar, gaining N14 to close at 1,408/$ at the official market.
The circular read in part, “We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject, wherein the CB approved a second tranche of the sale of FX to eligible BDCs.
“We write to inform you of the sale of $10,000 to each BDC at the rate of N1,251/$1. The BDCs are to sell to eligible end users at a spread of not more than 1.5 per cent above the purchase price.”
In the previous month, CBN Governor Olayemi Cardoso presented a detailed plan to reduce inflation, stabilize the exchange rate, and boost confidence in the banking system and economy.
During the Monetary Policy Committee meeting and a conference call with foreign investors, the central bank emphasized the goal of increasing foreign currency reserves and enhancing liquidity in the foreign exchange market.
“All the different measures we have taken to boost reserves and create more liquidity in the markets have started to pay off,” Cardoso said.
Analysts explain that when a central bank increases liquidity, it adds more money to the financial system. This helps to stabilize the foreign exchange market by providing additional funds for the buying and selling of currencies.
Marcel Okeke, the former Chief Economist of Zenith Bank, recently stated that Nigeria requires more dollar supply in order to stimulate the economy.
