CBN Takes Steps to Stabilize Market with $20,000 FX Sales to BDCs

CBN has directed each exchange to sell dollars to eligible customers at a rate not exceeding 1.5 percent of the purchase price. The Central Bank of Nigeria on Thursday announced that it has sold $20,000 to each Bureau De Change operator at the rate of 1,450 naira per US dollar.

The bank disclosed this in a circular to the President of the Association of Bureau De Change operators of Nigeria and the general public. In the circular signed by the Acting Director-General of the Bureau of Trade and Exchange, AA Mahdi, the CBN also directed each Bureau De Change to sell dollars to eligible customers at a rate not exceeding 1.5 percent of the purchase price.

“Following ongoing reforms in the foreign exchange market aimed at achieving a fair market determined exchange rate for the Naira, the Central Bank of Nigeria (CBN) has observed persistent distortions in the retail sector of the market which have accelerated exchange rate fluctuations. The parallel market and exchange premiums continue to grow.

“To this end, the CBN has approved the sales of FX to eligible Bureau De Change (BDCs) to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,450/$ (representing the lower band of the trading rate at NAFEM in the previous trading day),” it revealed.

All eligible BDCs are directed to make payment in naira to the listed CBN Naira Deposit Account Number and submit the payment confirmation along with other required documents to the relevant CBN branch (ABUJA, AWKA, KANO and LAGOS) to make the payment.

Meanwhile, the naira traded at a record high of N1,620 in the official market on Wednesday and closed at N1,581.
26/USD, down 0.32 percent, in the NAFEM window.

In an interview with Bloomberg TV, Central Bank Governor Emi Cardoso said the country has already seen its worst level of naira volatility.

“I do believe that we have more or less seen the worst in terms of volatility. We are also very alive to observing the way and manner in which that market operates and ensuring that it gives the best value that can be accomplished using certain tools,” he ascertained.