TheCable

The Central Bank of Nigeria (CBN) says it has approved the sale of foreign exchange (FX) to bureau de change (BDC) operators.

The CBN announced the development in a statement on Tuesday, reversing its decision to halt FX sale to the BDCs in 2021.

A BDC is a company licenced by the CBN to carry out retail FX business in Nigeria.

The move comes amid attempts by the regulator to achieve an appropriate market-determined exchange rate for the naira.

Speaking on reasons for the resumption, the CBN said it 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.

The apex bank said each “eligible” BDC will be allocated $20,000.

“To this end, the CBN has approved the sale of foreign exchange to eligible Bureau De Change (BDCs) to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,301/8-(representing the lower band rate of executed spot transactions at NAFEM for the previous trading day, as at today, 27th February 2024),” the statement reads.

“All BDCs are allowed to sell to end-users at a margin not more than one percent (1%) above the purchase rate from CBN.

“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).”