The Central Bank of Nigeria (CBN) resumed dollar sales to Bureaux De Change (BDC) operators on Thursday July 18, with a planned disbursement of $20,000 to each licensee.
The apex bank said the forex injection is expected to curb forex distortions, boost liquidity in the market and stabilise the naira.
In a circular to all BDC operators and the public, the CBN said it “observed the continued distortions in the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.”
The circular was signed by Aliyu Mahdi for the bank’s Acting Director of Trade and Exchange Department.
The apex bank said that eligible BDCs would be allowed to purchase a maximum of $20,000 at a fixed rate of N1,450 to the dollar. The rate is pegged to the lower band of the previous day’s trading rate on the Nigerian Autonomous Foreign Exchange (NAFEX) window.
BDCs are permitted to sell dollars to eligible end-users at a maximum margin of 1.5 percent above the purchase rate from the CBN.
To ensure compliance, BDCs are required to make Naira payments into designated CBN accounts and submit necessary documentation for disbursement at specified branches in Abuja, Lagos, Kano, and Awka in Anambra State.
The CBN attributed the decision to the widening gap between the official and parallel market exchange rates, which it blamed on distortions in the retail end of the market. The bank expressed hope that the move would also help to reduce pressure on the naira.
Association of Bureaux De Change Operators of Nigeria (ABCON) President Aminu Gwadabe said the new dollar injections in the market will induce liquidity and stabilise the naira.
He added that the move has already impacted positively on the Naira, which appreciated from N1,640/$ to N1,570 /$ at the parallel market.
