In a notable move to address the complexities of Nigeria’s foreign exchange market, the Central Bank of Nigeria (CBN) on Thursday announced the sale of dollars to eligible Bureau De Change (BDC) operators at the rate of N1450 per dollar.
This development was disclosed in a statement signed by AA Mahdi, the acting director of the Trade and Exchange Department at the CBN.
This initiative comes shortly after the apex bank sold $123 million to authorized dealers, a transaction from which the Association of Bureau De Change Operators of Nigeria (ABCON) claimed they were excluded.
In an interview with The PUNCH, ABCON President Aminu Gwadebe expressed dissatisfaction, stating that only banks received the forex intervention, leaving BDC operators out of the loop.
In a bid to rectify this and ensure a more inclusive distribution of foreign exchange, the CBN has now approved the sale of FX to eligible BDC operators specifically to meet the demand for invisible transactions.
According to the statement, each BDC is allocated $20,000 at the rate of N1450 per dollar. This rate represents the lower band of the trading rate at the Nigerian Autonomous Foreign Exchange Market (NAFEM) from the previous trading day.
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The CBN’s decision to include BDCs in this tranche of forex sales is part of broader ongoing reforms aimed at stabilizing and restructuring the foreign exchange market.
The central bank highlighted that it has observed persistent distortions in the retail end of the market, which have been exacerbating the disparities in the parallel market and further widening the exchange rate premium.
To mitigate these issues, the CBN emphasized that BDC operators must adhere strictly to selling to eligible end-users at a margin not exceeding 1.5 percent above the purchase rate from the CBN.
This measure is intended to ensure that the benefits of the forex sales reach the intended consumers and to curb speculative trading practices that contribute to market instability.
The inclusion of BDC operators in the forex sales is a strategic move by the CBN to enhance liquidity and foster a more balanced distribution of foreign exchange within the market.
By addressing the concerns of BDC operators and ensuring their participation, the CBN aims to bridge the gap between the official and parallel market rates, thereby fostering a more transparent and efficient forex market.
These efforts are part of a larger framework of reforms being implemented by the CBN to stabilize Nigeria’s foreign exchange market, promote economic growth, and ensure a fair and equitable distribution of foreign exchange resources.
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The central bank remains committed to monitoring market dynamics closely and adjusting its policies as needed to achieve these objectives.
As Nigeria continues to navigate the complexities of its economic landscape, the CBN’s proactive measures and commitment to reform play a crucial role in steering the country towards greater economic stability and prosperity.
The ongoing collaboration between the CBN, BDC operators, and other stakeholders is essential in achieving a robust and resilient forex market that can support Nigeria’s broader economic goals.