CBN begins sales of dollars to Bureau de Change operators

The Central Bank of Nigeria has announced its decision to start selling foreign exchange to eligible Bureau de Change operators across the country.

The CBN announced this development in a circular issued and signed by the Director of Trade and Exchange Department, Hassan Mahmud, on Tuesday, February 27, 2024.

In the circular titled “Sale of Foreign Exchange to Bureau de Change Operators to Meet Retail Demand for Eligible Invisible Transactions,” the apex bank said, the move was aimed at achieving an appropriate market-determined exchange rate for the naira.

The CBN said the sum of $20,000 will be sold to each eligible BDC operator at a rate of ₦1,301/$.

The circular reads, “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 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 CBN has approved the sale of foreign exchange to eligible Bureau De Change to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,301/$- (representing the lower band rate of executed spot transactions at NAFEM for the previous trading day, as of today, 27th February 2024).

“All BDCs are allowed to sell to end-users at a margin NOT MORE THAN one per cent (1 per cent) above the purchase rate from CBN.”

The apex bank also directed eligible BDCs to make Naira payments to the designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment, with other necessary documentation.

This is coming two years after the former Governor of the Central Bank, Godwin Emefiele stopped the sales of foreign exchange to BDC operators.