Apex bank to operators:“sell to end users at margin not more than 1.5 per cent above purchase rate….“
By Ola Kay
The Central Bank of Nigeria, CBN, returned to the sale of foreign exchange to eligible Bureau De Change operators on Thursday, job st as the naira fell to 1,570/$ at the parallel market
CBN sold the dollar to BDCs at N1,450 per one dollar
Disclosing this development in a statement signed by AA Mahdi for the Acting Director of the Trade and Exchange Department at the apex bank, the CBN said that, “Following the ongoing reforms in the foreign exchange market, with the objective of achieving an appropriate market-determined exchange rate for the naira, the Central Bank of Nigeria has observed the continued distortions in the retail end of the market.
“To this end, the CBN has approved the sale of FX to eligible Bureau de Change to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,450 (representing the lower band of the trading rate at NAFEM in the previous trading day).”
The CBN therefore cautioned the BDC operators to sell to eligible end-users at a margin not more than 1.5 per cent above the purchase rate from CBN.
The dollar, which traded as low as 1,640/$, settled at 1,570/$ at the parallel market, having closed Wednesday’s trading at 1,565/$.
As at then, the naira traded between 1,620/$ and 1,630/$ on the black market from the BDC operators, according to report.
Similarly, on Wednesday, the naira fell to a four-month low of 1,612.50/$ on the official market, based on the London Stock Exchange Group data,
A BDC operator in Abuja, Mohammed Magaji, stated that a dollar was sold at 1,630/$ and he was willing to buy at 1,620/$.
Some of the BDC operators disclosed that Another operator, they sell dollars at 1,620/$ and they can buy at 1,620/$.
The naira decline on had been blamed on acute shortages, speculative activity, move to guide inflation, and the increase in demand from recent duty waivers on certain critical food imports, according to some of the key operators, who agreed that the rate had since started to retreat from N1640/$ to N1570/$.
At the close of trading on Thursday, the naira closed on the official National Autonomous Foreign Exchange Market at 1,566.82/$ with a turnover of $273.14m; an improvement from Wednesday’s 1,581.65/$ with a daily turnover of $108.16m.
Speaking on the review of the return of sales of FX to BDCs, an operator, Gidado Sheu hailed the development, attributing it to a manifestation of the policy stress test in addressing the challenges confronting the retail end FX market.
He concluded that the review would help induce liquidity and boost confidence in the market.
In this vein, President of the Association of Bureau de Change of Nigeria, ABCON, Aminu Gwadebe, appealed to members to adhere to regulations for the survival and continuing sub-sector.
He was quited as saying, “I also called on the Government to continue to collaborate with stakeholders in their strategy and tactics to tackle the challenges facing the country. I also appeal to the CBN to continue to look into our appeals in allowing all our members illegible and Eligible to come together and form new partnerships in line with their new regulations 2024 on BDCs. We believe that will make the market liquid and stable.
Recall that fresh sale of forex to BDCs came a few days after the apex bank sold about $122.67m to 46 authorised dealers.
The sales, which took place on July 10, ranged between N1,480/$ and N1,500/$.
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