The Central Bank of Nigeria has made a firm decision to close the growing exchange rate difference in an effort to address the enduring inefficiencies in the retail sector of Nigeria’s foreign currency market.
According to The Times, the Director of Trade & Exchange Department, Dr. Hassan Mahmud, released a fresh circular on behalf of the CBN announcing the allocation of $20,000 to all qualified Bureau De Change operators nationwide.
This project is a component of larger attempts to relieve pressures fueling the parallel market and establish a market-driven exchange rate for the Naira.
This allotment will be sold for N1,301/$, which is the lower band rate of spot transactions that were completed at the Nigerian Autonomous Foreign Exchange Market as of the trading day before, February 27, 2024. It is expected that this tactic would steady the value of the Naira and bring much-needed liquidity to the market.
The circular also specifies particular rules for the BDC operators, stating that “All BDCs are allowed to offer foreign exchange to end users at a margin not to exceed one percent over their rate of acquisition from the CBN. The goal of this policy is to shield customers from price exploitation and stop exorbitant markups.
It says in the circular “It is required of qualified BDCs to deposit their Naira payments into specific CBN Foreign Currency Deposit Naira Accounts.
In order to enable distribution at the relevant CBN branches in Abuja, Awka, Lagos, and Kano, they must further provide confirmation of payment and other required paperwork.
