The Central Bank of Nigeria (CBN) has said it would sell $10,000 to each licensed Bureau De Change (BDC) operator nationwide at N1,021/$.
This initiative was part of strategic move to strengthen the naira against the US dollars after recent depreciation.
This was stated in a circular addressed to the President of the Association of Bureau De Change Operators (ABCON) where the apex bank outlined the details of the intervention.
CBN noted that BDCs will be able to purchase dollars at the rate of N1,021 per dollar.
It also mandated all BDCs to sell to eligible users at a spread of 1.5 percent above the purchase price, translating to a maximum selling price of N1,036.15 per dollar.
On the 8th of April 2024, the CBN sold $10,000 FX to each of the 1,588 participating BDC at a fixed rate of N1101 per US dollar at a spread capped at 1.5 percent above the purchase price from the CBN (approximately N1,116.15 per dollar). This limited the potential profit BDCs could make on each transaction
The latest circular has instructed all eligible BDCs to commence immediate payment of the Naira equivalent for their allocated $10,000 into designated CBN Naira Deposit Accounts.
This deposit must be accompanied by the submission of necessary documentation to facilitate the disbursement of forex at respective CBN branches.
The continue injection of US dollars into the BDC segment by the apex bank is to continue to remove the pressure on the parallel market, where forex become easily accessible.
However, the effectiveness of this strategy hinges on several factors: the extent to which the allocated amount meets the current demand for forex remains to be seen; strict adherence to the stipulated maximum selling price by BDCs is crucial for ensuring transparency and preventing market distortions; and while stop-gap measures like these can provide temporary relief, addressing the underlying causes of forex scarcity is essential for achieving long-term market stability.
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