CBN Mandates BDCs to Sell Dollar at N1,269

Dollars Pexels

In a circular signed by the bank’s Director of Trade and Exchange Department, Dr. Hassan Mahmud, the Central Bank of Nigeria has revealed its plan to allocate $10,000 to each Bureau de Change operator at N1,251/$.

Each BDC was directed by the apex bank to sell the dollars to eligible customers at a rate not exceeding 1.5 per cent above the purchase price, indicating that the BDCs are not required to sell above N1,269/$1.

The CBN ceased the sale of foreign exchange to BDCs on July 27, 2021, citing their violation of trading FX in wholesale amounts over $5,000, contrary to their licenses and Nigeria’s FX regulations.

Earlier, CBN announced its decision to sell $20,000 worth of foreign exchange to each eligible Bureau de Change operator across the country in February.

Following the suspension of former CBN Governor, Godwin Emefiele, more than two years later, the sales of foreign exchange to BDC operators were halted.

On Monday, the naira gained N14 to close at 1,408/$ at the official market, maintaining a steady appreciation against the United States dollar.

The circular read in part, “We write to inform you of the sale of $10,000 to each BDC at the rate of N1,251/$1. The BDCs are to sell to eligible end users at a spread of not more than 1.5 per cent above the purchase price.”

In a recent announcement, the CBN Governor, Olayemi Cardoso, detailed a comprehensive strategy to curb inflation, stabilize the exchange rate, and instill confidence in the country’s banking system and economy.

During last month’s Monetary Policy Committee meeting and a conference call with foreign portfolio investors, the central bank outlined expectations for sustained growth in the country’s foreign currency reserves and increased liquidity in the foreign exchange market.

Analysts explained that when a central bank enhances liquidity, it injects more money into the financial system to support stabilizing the foreign exchange market by providing more funds for buying and selling currencies.

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