CBN Crashes US Dollar Rate To N1,101/$1, Offers $15.88m

The Central Bank of Nigeria (CBN) has crashed the exchange rate for Bureau De Change (BDC) operators to N1,101 per dollar from N1,251/$1, following rising inflow of the greenback into the country.

The apex bank also planned to sell $15.88 million to 1,588 eligible BDCs.

At this rate, the BDCs would sell at not more than 1.5 per cent margin to the public, thus selling at N1,117.5/$1.

In a letter addressed to the president of the Association of Bureau De Change Operators of Nigeria, the CBN announced the sale of $10,000 to each BDC operator at an exchange rate of N1,101 per US dollar.

Recall that the ABCON president, Aminu Gwadabe, had appealed for the reduction in the rate at which the CBN sells dollars to its members to enable them keep up with the rapid appreciation of the domestic currency and the greenback

This development aims to address retail market demand for eligible invisible transactions.

The letter, signed by W.J. Kanya, on behalf of the director of the trade and exchange department of CBN, outlined the directive for BDCs to sell the acquired forex to eligible end-users at a spread not exceeding 1.5 per cent above the purchase price.

The measure was intended to facilitate access to foreign exchange for legitimate transactions within the retail market.

Effective immediately, all eligible BDCs are instructed to commence payment of the Naira deposit to designated CBN Naira Deposit Account Numbers, beginning today, Monday, April 8, 2024. Additionally, BDCs must submit confirmation of payment along with other necessary documentation for disbursement at the relevant CBN branches.

Furthermore, the communication emphasises that BDCs must adhere strictly to the rules and conditions outlined in previous correspondences and circulars.

This development underscores the CBN’s ongoing efforts to regulate and stabilise the forex market, ensuring transparency and compliance within the Bureau De Change sector.

For further inquiries or clarifications, BDC operators are encouraged to contact the trade and exchange department of the Central Bank.

The Association of Bureaux De Change Operators of Nigeria (ABCON), the umbrella body of all licensed Bureaux De Change had appealed to the CBN to adjust its applicable exchange rate downward to below the N1,251/$ it pegged for the BDCs.

In a letter to CBN the director, trade and exchange department, signed by Aminu Gwadabe, ABCON national president, the association further expressed concerns that many BDCs who funded their accounts for dollar allocations are yet to receive their allocation of dollars to meet up the legitimate critical demand of their clients due to scrutinisation of the BDCs documents for collections at the various designated centres which invariably made the BDCs vulnerable to exchange rate risk and significant loses.