JUST IN: CBN Begins Sale of Dollars to Bureau De Change Operators at $1/N1301

The Central Bank of Nigeria (CBN) has officially commenced the sale of foreign exchange, totaling $20,000, to eligible Bureau De Change (BDC) operators nationwide. The announcement was made through a circular issued by Hassan Mahmud, the Director of the Trade and Exchange Department at CBN.

The circular, titled “Sale of Foreign Exchange to Bureau de Change Operators to Meet Retail Demand for Eligible Invisible Transactions,” aims to address persistent distortions in Nigeria’s retail foreign exchange market and narrow the growing exchange rate gap. According to the directive, the CBN will sell the Dollar at a fixed rate of $1/N1301.

To ensure adherence to market stability, the CBN has mandated all BDC operators to sell the foreign exchange at a margin not exceeding one percent (1%) above the purchase rate. This move aligns with the ongoing reforms in the foreign exchange market, seeking a market-determined exchange rate for the Naira.

The circular emphasized the necessity of these measures to counteract price distortions at the retail end of the market, which have been contributing to disparities in the parallel market, further widening the exchange rate premium. The $20,000 allotment to each BDC will be sold at the rate of N1,301/$, reflecting the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market on the preceding trading day, February 27, 2024.

In compliance with the directive, eligible BDCs are instructed to make Naira payments to the designated CBN Foreign Currency Deposit Naira Accounts. Subsequently, they are required to submit confirmation of payment along with other necessary documentation for disbursement at designated CBN branches in Abuja, Awka, Lagos, and Kano.