CBN Boosts Forex Market With Sale Of $10,000 To BDCs

The Central Bank of Nigeria (CBN) has initiated the sale of $10,000 to Bureau De Change (BDC) operators, offering them direct access to US dollars at a discounted rate of N1, 021 per dollar.

The move, aimed at bolstering the foreign exchange market and stabilising the naira against the dollar signifies the second such sale this month and the fourth in the current year.

This also demonstrates a proactive stance in managing currency fluctuations and meeting essential foreign exchange demands.

Designed to address retail-end market needs, particularly for invisible transactions like travel allowances, tuition fees, and medical expenses, the policy involves the sale of $10,000 to the eligible BDCs.

The BDCs are then mandated to sell to end users with a maximum markup of 1.5 percent over the buying price.

“We write to inform you of the sale of $10,000 by the Central Bank of Nigeria (CBN) to BDCs at the rate of N1,021/$1,” stated the circular issued on Monday by the bank’s Director, Trade & Exchange Department, Hassan Mahmud.

BDC operators are directed to sell the greenback exclusively to eligible end users at a spread “not more than 1.5 percent above the purchase price.”

In its continuous efforts to boost the local currency, the CBN’s strategy has been scrutinised, with some analysts suggesting it may come at the expense of the foreign exchange, which has experienced a notable decline amid the naira’s appreciation.

“All eligible BDCs are therefore directed to commence payment of the Naira deposit to the underlisted CBN Naira Deposit Account Numbers from today, Monday April 22, 2024, and submit confirmation of payment, with other necessary documentations, for disbursement of FX at the respective CBN Branches,” the circular further specified.