BREAKING: CBN begins sale of dollars at N1301/$

The Central Bank of Nigeria (CBN) has announced the sale of foreign exchange to Bureau de Change (BDC) operators in the country.

This was contained in a memo issued on Tuesday and signed by Hassan Mahmud, the director of Trade and Exchange Department at the apex bank.

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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According to the memo, the move is part of CBN’s “strategic step” to increase liquidity and strengthen the naira against “manipulators”.

Mahmud noted that the CBN will sell the United States dollars to BDC operators at N1,301 per USD.

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The BDC operators are expected to sell to customers at not more than 1% above the purchase rate from the CBN.

Recall that the naira recently traded as high as N1,800 to the dollar.

The statement reads: “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.

“To this end, the CBN has approved the sale of foreign exchange to eligible Bureau De Change 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 of today, 27th February 2024).

“All BDCs are allowed to sell to end-users at a margin NOT MORE THAN one per cent (1 per cent) above the purchase rate from CBN.”

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It further directed eligible BDCs to make Naira payments to the designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment, with other necessary documentation.

“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 documentation, for disbursement at the appropriate CBN Branches ABUJA, AWKA, LAGOS and KANO,” it added.

The CBN in frantic efforts to save the free fall of the naira has made a number of significant reforms towards addressing Naira depreciation, such as probing and clearing FX backlog, limiting forex for foreign education and medical tourism, increasing BDCs’ minimum share capital, and curbing FX speculators, among others.

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