In a significant policy reversal, the Central Bank of Nigeria (CBN) has announced its intention to resume the sale of foreign exchange to Bureau De Change (BDC) operators across the country.
This decision marks a departure from the stance taken over two years ago by the former CBN Governor, Godwin Emefiele, who suspended forex sales to BDC operators in a bid to stabilize the forex market.
The policy shift was conveyed through a circular released on Tuesday by Hassan Mahmud, the Director of the Trade and Exchange Department at the CBN. The move is viewed as a strategic effort by the apex bank to boost liquidity in the foreign exchange market and stabilize the naira against other major currencies.
Emefiele’s suspension of forex sales to BDC operators aimed to curb the misuse of forex and speculation in the market, which was believed to contribute to the volatility of the naira.
Titled “Sale of Foreign Exchange to Bureau de Change Operators to meet retail demand for eligible invisible transactions,” the circular highlighted the aim of rectifying distortions in the retail segment of Nigeria’s foreign exchange market and bridging the widening gap in the exchange rate.
According to the circular, each eligible BDC operator will be allocated $20,000 at a rate of N1,301/$, reflecting the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market as of the previous trading day, dated February 27, 2024.
The circular further directed BDCs to sell to end-users at a margin not exceeding one per cent above the purchase rate from CBN. Additionally, eligible BDCs were instructed to make Naira payments to designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment, along with other necessary documentation, for disbursement at the appropriate CBN branches in Abuja, Awka, Lagos, and Kano.
