The Central Bank of Nigeria (CBN) has restarted dollar sales to Bureaux De Change (BDC) operators, allocating $20,000 to each licensed operator.
This initiative is designed to mitigate forex market distortions, enhance liquidity, and stabilize the naira.
In an official circular to BDC operators and the public, the CBN highlighted ongoing distortions in the retail forex market that are impacting the parallel market and widening the exchange rate gap. The circular was signed by Aliyu Mahdi on behalf of the Acting Director of the Trade and Exchange Department.
Under the new guidelines, eligible BDCs can purchase up to $20,000 at a fixed rate of N1,450 per dollar, aligned with the lower band of the previous day’s trading rate on the Nigerian Autonomous Foreign Exchange (NAFEX) window. BDCs can sell dollars to end-users at a maximum margin of 1.5 percent above the CBN purchase rate.
BDC operators are required to make Naira payments into designated CBN accounts and submit necessary documentation at specified branches in Abuja, Lagos, Kano, and Awka in Anambra State to ensure compliance.
The CBN’s decision aims to address the widening gap between the official and parallel market exchange rates, attributed to retail market distortions. The bank anticipates that this measure will alleviate pressure on the naira.
Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria (ABCON), welcomed the CBN’s move, noting that it will boost liquidity and stabilize the naira. He reported that the naira has already strengthened from N1,640/$ to N1,570/$ in the parallel market following the announcement.
Gwadabe commended the reintroduction of forex sales to BDCs as a positive step in resolving challenges in the retail forex market. He emphasized the crucial role of BDCs in the CBN’s demand monitoring mechanism and their importance in meeting liquidity needs.
He called on ABCON members to adhere to regulations to sustain the sub-sector and urged the government to collaborate with stakeholders to tackle the country’s economic challenges.
