Henceforth, bureau de change (BDC) operators are expected to sell foreign exchange (FX) to end users at one percent margin of the purchase rate.
The development follows the Central Bank of Nigeria (CBN’s) plan to sell FX to BDC operators at N1,301/$, according to a statement yesterday signed by the Director, Trade and Exchange Department, Hassan Mahmud. CBN explained that the decision is to enable BDC operators to meet the retail demand for FX for eligible invisible transactions.
The statement reads in part: “Following the ongoing 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 CB has approved the sale of foreign exchange to eligible bureau de change (BDCs) 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/$1 – (representing the lower band rate of executed spot transactions at NAFEM for the previous trading day, as of today, 27th February 2024).”
It added that all BDCs should sell to end-users at a margin not more than one per cent above the purchase rate from CBN. “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 documentations, for disbursement at the appropriate CBN branches – Abuja, Awka, Lagos and Kano,” the statement concluded.
