The Central Bank of Nigeria (CBN) on Thursday approved the sales of $20,000 each to Bureau de Change (BDC) operators in the country.
TheNewsGuru.com (TNG) reports CBN announced this in a statement signed by A. A. Mahdi on behalf of the Acting Director in charge of Trade and Exchange Department.
According to the apex bank, the move is to meet retail market demand for eligible invisible transactions.
“Following the on-going reforms in the foreign exchange market, with the objective of achieving an appropriate market determined exchange rate for the Naira, the Central Bank of Nigeria (CBN) has observed the continued distortions in the retail end of the market, which is feeding into the parallel market and further widen the exchange rate premium.
“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/S (representing the lower band of the trading rate at NAFEM in the previous trading day).
“All BDCs are allowed to sell to eligible end-users at a margin NOT MORE THAN one point five percent (1.5 %) above the purchase rate from CBN.
“All eligible BDCs are directed to make the Naira payment to the listed CB Naira Deposit Account Numbers and submit confirmation of payment with other necessary documentation for disbursement at the appropriate CBN Branches – (ABUJA, AWKA, KANO and LAGOS),” the statement reads.
Recall that the CBN had only on July 12th sold the sum of 122,671 million dollars to 46 authorised BDC operators.
According to a statement issued by the apex bank’s Director in charge of Financial Markets, Dr Omolara Duke, that move was aimed at promoting stability as well as to reduce market volatility in the foreign exchange market.
Duke said that 67.5 million dollars of the total sale was sold to 27 authorised dealers, while the sum of 2.5 million was bought from one authorised dealer on July 10.
She said that the range of the bid for the July 10 sales was between N1,480 and N1,500 to the dollar, while the value date for the payments, going by the settlement cycle of two days was July 12.
“Similarly, on July 11, the sum of 55.171 million dollars was sold to 19 authorised dealers at N1,540 to the dollar. The value date for the payments of the spot sale is July 15,” she said.
She urged all authorised dealers to ensure that foreign exchange purchases from the CBN were used exclusively for trade-backed transactions, which should be reported within 72 hours.
Duke said that the CBN supplied FX to the market to improve liquidity through spot sales to authorised dealers using two-way quotes.
She assured that the CBN would continue to ensure stability in the FX market.