The Central Bank of Nigeria has announced plans to inject foreign exchange worth $20,000 to each eligible Bureau De Change operator across the country.
According to The PUNCH, this move, outlined in a statement signed by the Acting Director of Trade and Exchange Department, Dr. W. J. Kanya, which was made public on Wednesday.
The CBN explained that this intervention aims to provide liquidity for the retail market, particularly for invisible transactions.
The timing of this decision follows a significant depreciation of the naira, which fell to N1,658.48 per dollar at the Nigerian Autonomous Foreign Exchange Market on Tuesday.
On the same day, parallel market rates revealed BDC operators were selling the dollar at N1,670.
To address this growing disparity, the CBN’s statement confirmed, “This is to inform the Bureau De Change Operators and the general public that the CBN will be providing additional liquidity to this segment of the foreign exchange market. To this end, the CBN has approved the sale of US$20,000.00 to each eligible BDC at the rate of N1,590/$. This is to meet the demand for invisible transactions.”
Additionally, the CBN imposed strict rules on BDC operators, warning that they are not permitted to sell the foreign currency at more than one percent above the purchase rate.
This translates to a maximum profit margin of N15.59 on each dollar sold to customers.
This action, the CBN believes, will help meet demand for foreign currency required for invisible transactions, such as travel, school fees, and medical bills, while also working to narrow the widening gap between the official and parallel market rates.
The statement emphasized, “All BDCs are allowed to sell to eligible end-users at a margin of NOT MORE THAN one percent above the purchase rate from CBN.”
Eligible BDC operators must adhere to the outlined process for accessing the funds, including making naira payments into designated CBN Deposit Account Numbers and submitting payment confirmation and required documentation to the nearest CBN branches in Abuja, Awka, Kano, and Lagos for collection.
This marks the seventh attempt by the CBN to sell foreign exchange to BDCs since reinstating their access earlier in the year.
The bank had previously suspended such sales in 2021, revoking the licenses of over 4,000 BDC operators in February. As of now, with 1,583 approved BDC operators in the country, approximately $31.66 million is expected to be injected into the retail market through this initiative.
Meanwhile, as the naira continues to lose ground, it further dropped by N9 or 0.53 percent, closing at N1,667.42 on Wednesday in NAFEM, down from N1,658 the day before.
