Central Bank of Nigeria Resumes Dollar Sales to Bureaux De Change, Naira Appreciates
The Central Bank of Nigeria (CBN) has announced the resumption of dollar sales to bureaux de change (BDCs), a move aimed at curbing the sharp depreciation of the Naira, which had plummeted to N1,640 per dollar in the parallel market.
The resumption of dollar sales, the first since April, was confirmed in a circular signed by A. A. Mahdi, Acting Director of the Trade and Exchange Department at the CBN.
The circular detailed that the apex bank will sell $20,000 to each BDC, with strict guidelines on pricing.
The CBN directed BDCs to sell to end-users at a margin of no more than N1,450 per dollar. This directive sets the selling rate at approximately N1,475.75 per dollar for end-users, a measure intended to stabilise the currency and ensure a fair market rate.
In the circular, the CBN stated: “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 continued distortions in the retail end of the market. These distortions are feeding into the parallel market and further widening the exchange rate premium.”
The statement continued: “To this end, the CBN has approved the sales of FX to eligible Bureaux 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 N1,450 per dollar, representing the lower band of the trading rate at the Nigeria Foreign Exchange Market (NAFEM) in the previous trading day.”
The CBN also emphasised that all BDCs are required to sell to eligible end-users at a margin not exceeding 1.5% above the purchase rate from the CBN. Furthermore, BDCs must make Naira payments to designated CBN Naira Deposit Account Numbers and submit confirmation of payment with necessary documentation for disbursement at CBN branches in Abuja, Awka, Kano, and Lagos.
Following this announcement, the Naira, which had sharply depreciated to N1,640 per dollar in the parallel market earlier in the day, appreciated to N1,572 per dollar by the close of business.
Despite this improvement, the new rate still represents a N2 depreciation compared to the previous day’s closing rate of N1,570 per dollar.
This development marks a significant intervention by the CBN to stabilise the Naira and address the volatility in the foreign exchange market.
