The Central Bank of Nigeria (CBN) has announced that it will provide $20,000 to each eligible Bureau De Change (BDC) operator across the country. This move, aimed at achieving an appropriate market-determined exchange rate for the Naira, comes in light of continued price distortions at the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.
According to Dr. Hassan Mahmud, CBN’s Director of Trade & Exchange Department, the amount will be sold to each BDC at the rate of N1,301 per dollar, representing the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market (NAFEM) as of the previous trading day. Mahmud further stated that all BDCs are allowed to sell to end-users at a margin not more than one percent above the purchase rate from CBN.
In a statement, Mahmud said, "Following the ongoing reforms in the foreign exchange market, aimed at achieving an appropriate market-determined exchange rate for the Naira, the Central Bank of Nigeria (CBN) has observed the continued price distortions at the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium."
"All eligible BDCs are directed to make the Naira payment to the designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment, with other necessary documentation, for disbursement at the appropriate CBN Branches (ABUJA, AWKA, LAGOS, and KANO)," the statement added.
