The Central Bank of Nigeria (CBN) has introduced a new policy to increase the availability of foreign exchange in the market. As part of this effort, the CBN is selling dollars to Bureau De Change (BDC) operators at the rate of N1,580 per dollar. This was announced in a circular signed by W.J. Kanya, acting director of the trade and exchange department, on September 6.
According to the directive, each eligible BDC operator can purchase up to $20,000 in foreign exchange from the CBN. These operators are then allowed to sell the FX to their customers at a margin of no more than 1% above the purchase rate.
This initiative is aimed at boosting liquidity and meeting the increasing demand for dollars, especially for “invisible transactions.” These transactions include things like paying for foreign school fees, travel allowances, and medical expenses.
BDC operators interested in purchasing FX from the CBN are required to deposit naira into specific CBN accounts assigned to them. They must also submit all necessary documentation at designated CBN branches in cities like Abuja, Awka, Kano, and Lagos before they can collect the $20,000.
This move is seen as a strategy by the CBN to stabilize the naira and ease pressure on the currency in the FX market.
The CBN’s decision to sell FX at a fixed rate is a step toward providing more liquidity in the Nigerian financial system. By supplying BDCs with dollars, the central bank hopes to meet the increasing demand for FX from businesses and individuals. It could also help to address the gap between the official and parallel market exchange rates, which has been widening in recent months.
This policy may bring some short-term relief to the naira and make foreign currency more accessible to end-users, but it remains to be seen how sustainable this measure will be in the long run, given Nigeria’s ongoing economic challenges.
CBN is selling dollars to BDCs at N1,580 per dollar.
Each BDC operator can buy up to $20,000.
BDCs are allowed to sell FX to their customers at a margin of no more than 1% above the purchase rate.
This move is part of CBN’s effort to improve liquidity in the market and meet demand for foreign exchange, especially for school fees, travel, and medical expenses.
While this may provide some relief for Nigerians needing dollars for specific transactions, the long-term stability of the naira will depend on more comprehensive policies to address the nation’s economic challenges, including inflation and reliance on imports.
