The Central Bank of Nigeria Announces Fresh Foreign Exchange Sales to Bureau De Change Operators

In a bid to boost the foreign exchange market, the Central Bank of Nigeria (CBN) has announced its decision to sell foreign exchange worth $20,000 to eligible Bureau De Change (BDC) operators across the country. This latest intervention comes just hours after the Nigerian naira dropped in value against the dollar to N1,658.48 in the Nigerian Autonomous Foreign Exchange (NAFEM) on Tuesday.

According to a statement signed by the Acting Director of Trade and Exchange Department, Dr. W. J Kanya, the CBN aims to provide additional liquidity to the segment of the foreign exchange market that caters to retail transactions. The sales will help operators meet the demand for eligible invisible transactions, such as international money transfers, and curb the widening exchange rate premium observed in the parallel market.

The CBN has approved the sale of US$20,000 to each eligible BDC at the rate of N1,590/$, which is significantly higher than the parallel market rate of 1670/dollar. However, operators are warned not to sell above one percent of the purchase rate, meaning they cannot make more than N15.59 profit on each dollar they sell to customers.

This measure is expected to inject about $31.66 million into the retail end of the market during these sales, benefiting 1,583 approved BDC operators. Meanwhile, the naira dropped further by N9 or 0.53 percent to N1667.42 after trading activities at NAFEM on Wednesday, from N1,658 recorded on Tuesday.

This is the seventh attempt by the CBN to sell foreign exchange to BDCs since the prolonged period of suspension was lifted earlier in the year following the revocation of licenses of over 4,173 BDC operators in February.