In a move aimed at rectifying the persisting distortions in the retail segment of Nigeria’s foreign exchange market, the Central Bank of Nigeria (CBN) has taken a decisive step to bridge the widening gap in the exchange rate.
Through a new circular by Dr Hassan Mahmud, the Director of Trade & Exchange Department, the CBN has announced its decision to distribute $20,000 to each eligible Bureau De Change (BDC) operator across the country.
This initiative is part of the broader efforts to achieve a market-driven exchange rate for the Naira and alleviate the pressures feeding into the parallel market.
This allocation will be sold at a rate of N1,301/$, reflecting the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market (NAFEM) as of the previous trading day, dated February 27, 2024. This strategy is anticipated to inject much-needed liquidity into the market and stabilise the Naira’s value.
Also, the circular outlines specific guidelines for the BDC operators, stipulating that all BDCs are permitted to sell foreign exchange to end-users at a margin not exceeding one percent (1%) above their purchase rate from the CBN. This measure is intended to prevent excessive mark-ups and protect consumers from price exploitation.
Eligible BDCs are mandated to deposit their Naira payments into designated CBN Foreign Currency Deposit Naira Accounts. They must also provide confirmation of payment along with other necessary documentation to facilitate disbursement at the appropriate CBN branches located in Abuja, Awka, Lagos, and Kano.
