CBN begins selling dollars to BDCs

The Central Bank of Nigeria (CBN) has confirmed that it has begun selling foreign exchange worth $20,000 toeligible Bureau De Change (BDC) operators across the country.

The apex bank announced this in a new circular issued and signed by the Director, Trade and Exchange Department, Hassan Mahmud, on Tuesday.

This comes over two years after the suspended former CBN governor, Godwin Emefiele, stopped the sales of foreign exchange to BDC operators in that segment of the forex market.

The circular titled, “Sale of Foreign Exchange to Bureau de Change Operators to meet retail demand for eligible invisible transactions” said the move aimed at rectifying the persisting distortions in the retail segment of Nigeria’s foreign exchange market and bridging the widening gap in the exchange rate.

It said the 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 as of the previous trading day, dated February 27, 2024.

The circular read, “Following the ongoing reforms in the foreign exchange market, aimed at achieving an appropriate market-determined exchange rate for the Naira, the Central Bank of Nigeria has observed the continued price distortions at the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.

“To this end, the CBN has approved the sale of foreign exchange to eligible Bureau De Change to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,301/$- (representing the lower band rate of executed spot transactions at NAFEM for the previous trading day, as of today, 27th February 2024).

“All BDCs are allowed to sell to end-users at a margin NOT MORE THAN one per cent (1 per cent) above the purchase rate from CBN.”