CBN to sell $15.88m to eligible BDCs at N1,101/$ as Naira steadies at parallel market; Nigeria to receive $1bn oil-backed loan from Afreximbank to address shortage of dollar
The Central Bank of Nigeria (CBN) on Monday reviewed the exchange rate for Bureau De Charge (BDC) Operators to N1,101 per dollar from N1,251/$1, as the apex bank’s dollar firepower grows.
In a letter addressed to the president of the Association of Bureau De Change Operators of Nigeria, the CBN announced the sale of $10,000 to the BDC operators at an exchange rate of N1,101 per US dollar.
This development aims to address retail market demand for eligible invisible transactions.
The letter, signed by W.J. KANYA on behalf of the director of the trade and exchange department, outlines the directive for BDCs to sell the acquired forex to eligible end-users at a spread not exceeding 1.5 percent above the purchase price.
This measure is intended to facilitate access to foreign exchange for legitimate transactions within the retail market.
Effective immediately, all eligible BDCs are instructed to commence payment of the Naira deposit to designated CBN Naira Deposit Account Numbers, beginning today, Monday, April 8, 2024. Additionally, BDCs must submit confirmation of payment along with other necessary documentation for disbursement at the relevant CBN branches.
Furthermore, the communication emphasizes that BDCs must adhere strictly to the rules and conditions outlined in previous correspondences and circulars.
This development underscores the CBN’s ongoing efforts to regulate and stabilize the forex market, ensuring transparency and compliance within the Bureau De Change sector.
For further inquiries or clarifications, BDC operators are encouraged to contact the trade and exchange department of the Central Bank.
Recall the Association of Bureau De Change Operators of Nigeria (ABCON), the umbrella body of all licensed Bureau De Change had appealed to the CBN to adjust its applicable exchange rate downward to below the N1,251/$ it pegged for the BDCs.
In a letter to CBN the director, trade and exchange department, signed by Aminu Gwadabe, ABCON national president, the association further expressed concerns that many BDCs who funded their accounts for dollar allocations are yet to receive their allocation of dollars to meet up the legitimate critical demand of their clients due to scrutiny of the BDCs documents for collections at the various designated centers which invariably made the BDCs vulnerable to exchange rate risk and significant loses.
Nigeria is set to get a much-needed boost in May with a $1.05 billion loan from the African Export-Import Bank (Afreximbank), according to Bloomberg’s report.
This syndicated loan will be backed by Nigeria’s oil reserves, providing the country with vital funds to revive its economy and address the shortage of hard currency.
The influx of foreign currency is expected to stabilise the local foreign exchange market, making it easier for businesses to import goods and conduct international trade. This, in turn, could stimulate economic activity and growth.
