The Central Bank of Nigeria (CBN) has excluded Bureau De Change (BDC) operators from its latest tranche of foreign exchange (forex) sales, limiting the intervention to banks. This was confirmed by the President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadebe, in an interview with The PUNCH.
Gwadebe explained that the current forex intervention by the CBN at the NAFEX (Nigerian Autonomous Foreign Exchange Fixing) window excludes BDCs, saying, “No, it is their usual intervention at the NAFEX window which presently excludes the BDCs but only banks.”
The apex bank began the sales of $122.67 million to 46 approved dealers as part of its efforts to stabilize the forex market. These authorized dealers primarily include banks, while BDC operators have been excluded.
In a statement issued last Friday, CBN Director of Financial Markets, Dr. Omolara Duke, highlighted the central bank’s commitment to promoting stability and reducing market volatility in the foreign exchange market. The statement read: “The Central Bank of Nigeria has sold the sum of $122,671,000 to 46 authorized dealers in its determination to promote stability and reduce market volatility in the foreign exchange market.”
Previously, Aminu Gwadebe had informed The PUNCH that the CBN suspended supply to the BDCs since March, signaling a shift towards complete liberalization of the foreign currency market, which would no longer require direct intervention from the central bank. He noted, “The BDC window has been suspended by the Central Bank of Nigeria since around March or so. The last time we were funded I think was around March.”
The exclusion of BDCs from forex sales has led to further depreciation of the naira, which fell to N1554/$ at the official market on Thursday.
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Earlier this week, Nigeria's external reserves reached $35.05 billion as of July 8, 2024, crossing the $35 billion mark for the first time under President Bola Tinubu’s administration. The CBN's sales of forex took place on Wednesday and Thursday this week.
On Wednesday, the CBN sold $67.5 million to 27 authorized dealers while purchasing $2.5 million from one dealer. The bid range for these transactions was between N1,480/$1 and N1,500/$1, with payments scheduled for July 12, 2024. On Thursday, the CBN sold $55.17 million to 19 authorized dealers at a rate of N1,540.0/$1. Payments for these transactions are due on July 15, 2024.
The CBN has directed all authorized dealers to ensure that forex purchases from the bank are used exclusively for trade-backed transactions, which must be reported within 72 hours. The statement also mentioned that the CBN supplies foreign exchange to the market through FX spot sales to authorized dealers using two-way quotes, aiming to enhance liquidity.
