The Central Bank of Nigeria (CBN), has announced its decision to resume the sale of foreign exchange to eligible Bureau De Change (BDC), operators across the country.
This move, revealed in a circular issued by the Director of the Trade and Exchange Department, Hassan Mahmud, aims to address distortions in the retail segment of Nigeria’s foreign exchange market and narrow the gap in exchange rates.
After more than two years since the suspension by former CBN Governor Godwin Emefiele, the apex bank has reintroduced the allocation of $20,000 to each eligible BDC operator.
The exchange rate for this allocation is set at N1,301 per US dollar, reflecting the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market on February 27, 2024.
The circular emphasized that BDCs are permitted to sell to end-users with a margin not exceeding one percent above the purchase rate from the CBN.
Eligible BDCs are instructed to make Naira payments to designated CBN Foreign Currency Deposit Naira Accounts and provide confirmation of payment along with other necessary documentation for disbursement at specific CBN branches in Abuja, Awka, Lagos, and Kano.
This decision by the CBN comes amidst ongoing reforms in the foreign exchange market aimed at achieving a market-determined exchange rate for the Naira.
It follows a series of measures implemented by the central bank to address Naira depreciation, including the investigation and clearance of FX backlog, restrictions on forex for foreign education and medical tourism, raising BDCs’ minimum share capital, and measures to deter FX speculators.
Further details on the implications and outcomes of this latest development are expected to emerge in due course.
