The Central Bank of Nigeria (CBN) has authorized a second tranche of foreign exchange (FX) sale to eligible Bureau De Change (BDC) operators to cater to their demand for invisible transactions. Each BDC will receive $10,000 at the rate of N1,251 per dollar, representing a reduction compared to the initial tranche.
In a letter dated March 25, 2024, addressed to the President of the Association of Bureau De Change Operators of Nigeria (ABCON) and signed by Dr. Hassan Mahmud, Director of the Trade and Exchange Department at the CBN, the bank conveyed the latest allocation. The CBN also instructed BDC operators to sell FX to eligible end-users at a spread of not more than 1.5 percent above the purchase price, an increase compared to the previous one percent.
Furthermore, the CBN cautioned that any BDC found breaching the terms of sale to end-users would face appropriate sanctions, including outright suspension from further participation in the sale.
This decision follows the central bank’s previous intervention, where it allocated $20,000 to each BDC at the rate of N1,301 per dollar. The intervention aimed to address price distortions in the retail end of the market, which were contributing to widening the exchange rate premium and complement ongoing reforms in the foreign exchange market.
The naira continued its gains on the official NAFEM window, appreciating by N23.45 to close at N1,408.04 per dollar. On the parallel market, it closed at N1,400 per dollar, compared to N1,440 per dollar over the weekend. Daily foreign exchange turnover on the official window also increased by 11.06 percent to $221.80 million.
In a related development, the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) commended the CBN’s clearance of a $7 billion forex backlog but reiterated the need to address unmet forex requests by some private sector operators. The association called for a more comprehensive and transparent approach to resolving the remaining foreign exchange allocations, emphasizing the importance of honoring legitimate transactions initiated under previous administrations.