The Central Bank of Nigeria (CBN) has approved the sale of $20,000 to each eligible Bureau De Change (BDC) operator at N1590 per dollar with the aim of meeting the retail market demand for invisible transactions and boost liquidity in the sector.
Invisible transactions include money transfers, travel allowances, and other invisible services that require foreign exchange.
By providing this additional liquidity, the CBN seeks to address the widening exchange rate premium observed in the parallel market.
To ensure fairness and prevent excessive profit-making, the CBN has set a margin of not more than one percent above the purchase rate from the CBN for BDCs to sell to eligible end-users.
This means BDCs can only make a maximum profit of N15.90 per dollar sold.
Eligible BDCs interested in this transaction are required to make the naira payment to the CBN’s deposit account numbers.
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Additionally, payment confirmation and necessary documentation for disbursement must be submitted at designated CBN branches in Abuja, Awka, Kano and Lagos.
This is the seventh attempt by the CBN to sell foreign exchange to BDCs after a prolonged suspension in 2021.
With 1,583 approved BDC operators, approximately $31.66 million may be injected into the retail end of the market during these sales.
The CBN’s efforts to stabilize the foreign exchange market and curb the activities of speculators and illegal traders are ongoing. By selling foreign exchange to BDCs, the CBN aims to increase liquidity and reduce the pressure on the naira.
