Just In: CBN Allocates $20,000 To Each BDC To Stabilize The Naira
The Central Bank of Nigeria (CBN) has made a firm decision to close the growing exchange rate differential in an effort to address the enduring distortions in the retail sector of Nigeria's foreign exchange market.
Dr. Hassan Mahmud, the Director of Trade & Exchange Department, released a new circular on behalf of the CBN announcing the allocation of $20,000 to all qualified Bureau De Change (BDC) operators nationwide.
This project is a component of larger attempts to relieve pressures fueling the parallel market and establish a market-driven exchange rate for the Naira.
The selling price of this allocation is set at N1,301/$, which is in line with the lower band rate of spot transactions that were completed at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on the previous trading day, which was February 27, 2024. It is expected that this tactic will stabilize the value of the Naira and bring much-needed liquidity to the market.
A margin of no more than one percent (1%) over their purchase rate from the CBN is allowed for all BDCs when selling foreign exchange to end users, according to the circular, which also provides specific guidelines for the BDC operators. This action aims to shield customers from price exploitation and stop excessive markups.
It is required of qualified BDCs to place their Naira payments into specific CBN Foreign Currency Deposit Naira Accounts. In order to enable disbursement at the relevant CBN branches in Abuja, Awka, Lagos, and Kano, they must additionally submit confirmation of payment and other required paperwork.
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