The Central Bank of Nigeria (CBN) is taking action to address issues in the retail foreign exchange market by bridging the gap in exchange rates.
Dr. Hassan Mahmud, the Director of Trade & Exchange Department, has issued a circular announcing that each eligible Bureau De Change (BDC) operator will receive $20,000.
This initiative is part of a larger effort to establish a market-driven exchange rate for the Naira and reduce pressures on the parallel market.
The $20,000 allocation will be sold at a rate of N1,301/$, based on the lower band rate of spot transactions at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on February 27, 2024. This move is expected to increase liquidity in the market and stabilize the value of the Naira.
Additionally, the circular provides clear guidelines for BDC operators. It states that all BDCs can sell foreign exchange to end-users with a maximum markup of one percent (1%) above their purchase rate from the CBN. This rule aims to avoid high markups and safeguard consumers from being overcharged.
The circular reads: “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 BDCs are allowed to sell to end-users at a margin NOT MORE THAN one percent (1%) above the purchase rate from CBN.
Qualified BDCs are required to deposit their Naira payments into specific CBN Foreign Currency Deposit Naira Accounts. They must also submit proof of payment and other required documents to help with disbursement at the relevant CBN branches in Abuja, Awka, Lagos, and Kano.
