The Central Bank of Nigeria (CBN) has announced the commencement of the second tranche of sales of foreign exchange (FX) to bureau de change (BDC) operators, marking a significant move in the country’s currency market.
This announcement was made through a circular titled ‘Sales Of FX To Meet Retail Market Demand For Eligible Invisible Transactions’, addressed to the president of the Association of Bureau De Change Operators of Nigeria (ABCON) on March 25.
This development follows closely on the heels of the first tranche of sales, which was initiated nearly one month ago, signaling the CBN’s commitment to stabilizing the FX market and meeting the retail market demand for eligible invisible transactions.
On February 27, the apex bank had resumed the sale of FX to BDCs, with each “eligible” BDC allocated $20,000 at a specified rate. However, in the recent circular signed by Hassan Mahmud, Director of the CBN’s Trade and Exchange Department, the second tranche entails the sale of $10,000 to each BDC at the rate of N1,251/$.
In addition, the CBN directed BDCs to sell to eligible end-users at a spread of not more than 1.5 percent above the purchase price, ensuring fair and transparent transactions within the currency market.
Furthermore, the circular emphasized the importance of compliance with the stipulated guidelines, requiring all eligible BDCs to make naira payments to designated CBN accounts before the specified deadline. Failure to adhere to these directives may result in appropriate sanctions, including suspension from further participation in the FX sale.
The announced rate of N1,251/$ is notably lower than the rates observed in both the official and parallel currency markets. As of March 22, the official window closed at N1,431/$, while parallel market traders reported a rate of N1,470/$ on the same day.
Overall, the second tranche of FX sales to BDCs underscores the CBN’s proactive measures to enhance liquidity, promote exchange rate stability, and support economic activities within Nigeria. It represents a concerted effort by the apex bank to address currency market challenges and foster confidence among market participants.
