In a bid to bolster liquidity and fortify the Nigerian naira against market manipulations, the Central Bank of Nigeria (CBN) has announced the resumption of foreign exchange sales to Bureau De Change (BDC) operators.

The decision comes amidst ongoing reforms in the foreign exchange market, aimed at establishing a market-determined exchange rate for the naira. The CBN identified persistent price distortions at the retail end of the market, which have been exacerbating the exchange rate premium in the parallel market.

Exchange Rate and Sales Details:

Under the new arrangement, the CBN will provide $20,000 to each eligible BDC at a rate of N1,301 per US dollar. This rate is based on the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market (NAFEM) for the previous trading day.

Operational Guidelines:

BDC operators are mandated to sell foreign exchange to end-users at a margin not exceeding one percent above the purchase rate from the CBN. Additionally, all eligible BDCs are required to make Naira payments to designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment, along with necessary documentation, for disbursement at select CBN branches in Abuja, Awka, Lagos, and Kano.

Statement from CBN:

Dr. Hassan Mahmud, Director of the Trade & Exchange Department at the CBN, emphasized the importance of adhering to the guidelines outlined, urging BDC operators to comply accordingly.

Impact and Outlook:

The resumption of foreign exchange sales to BDC operators is anticipated to alleviate liquidity constraints and mitigate the prevalence of parallel market distortions. By facilitating access to foreign exchange for eligible invisible transactions, the CBN aims to promote stability and transparency in the Nigerian foreign exchange market.

Conclusion:

As the CBN takes proactive measures to address market challenges, stakeholders are encouraged to collaborate in ensuring the effective implementation of the foreign exchange sales program. The success of these initiatives is pivotal in safeguarding the stability and resilience of the Nigerian economy amidst evolving global dynamics.

Contact Information:

For further inquiries, individuals and BDC operators are advised to reach out to the CBN via the Trade and Exchange Department.

Closing Note:

The resumption of foreign exchange sales to BDC operators marks a significant step in the CBN's efforts to enhance liquidity and bolster the naira against destabilizing forces in the foreign exchange market.