Breaking: Central Bank Of Nigeria Initiates Dollar Sales To Bureau De Change Operators

Breaking: Central Bank Of Nigeria Initiates Dollar Sales To Bureau De Change Operators....KINDLY READ THE FULL STORY HERE▶

This significant development signals a notable departure from the position adopted over two years ago by the then CBN Governor, Godwin Emefiele, who suspended the sale of foreign exchange to Bureau de Change (BDC) operators in an effort to stabilize the forex market……….CONTINUE READING

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The shift in policy was officially communicated through a circular released on Tuesday, bearing the signature of Hassan Mahmud, the Director of the Trade and Exchange Department at the CBN.

The decision is being interpreted as a strategic move by the apex bank to boost liquidity in the foreign exchange market and stabilize the naira against major global currencies.

Emefiele’s initial suspension of forex sales to BDC operators aimed to address the perceived misuse of foreign exchange and speculative activities in the market, which were thought to contribute to the naira’s volatility.

The recently issued circular, titled “Sale of Foreign Exchange to Bureau de Change Operators to meet retail demand for eligible invisible transactions,” outlines the objective of rectifying distortions in the retail segment of Nigeria’s foreign exchange market and narrowing the widening gap in exchange rates.

According to the circular, the allocated foreign exchange will be sold at a rate of N1,301/$, reflecting the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market as of the previous trading day, dated February 27, 2024.

The circular 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 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.

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