On Thursday, the Central Bank of Nigeria sold dollars to qualifying Bureau de Change operators at a rate of N1450 per dollar.
This was stated in a statement issued on Thursday by AA Mahdi, the acting director of the CBN’s Trade and Exchange Department. This comes days after the apex bank sold $123 million to approved dealers. The Association of Bureau De Change Operators of Nigeria stated that they were excluded from that batch of forex sales.
Aminu Gwadebe, President of the ABCON, told The PUNCH that only banks received currency assistance.
In the most recent move, the CBN said that it had “approved the sales of FX to eligible Bureau De Change to meet the demand for invisible transactions.
” The sum of $20,000 is to be sold to each BDC at the rate of N1,450/$ (matching the lower range of the NAFEM trading rate on the preceding trading day).” Premising the move on continuing reforms in the foreign exchange market, the CBN stated that it has observed continued distortions in the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.”
It urged BDCs to sell to approved end users at a margin of not more than 1.5 percent above the CBN’s buying rate.
Bottom Line
The rate of N1450/$ is significantly higher than previous rates, indicating a substantial depreciation of the naira.
This move might be a response to market pressures and an attempt to curb the influence of the parallel market.
The stipulation that BDCs sell to approved end users at a margin of no more than 1.5 percent above the CBN’s rate is intended to control excessive profiteering and ensure a fair distribution of forex.
