CBN Initiates Dollar Sale at N1301/$, Aims to Bolster Naira
Written by Deborah Oyinloye on February 27, 2024
In a significant move, the Central Bank of Nigeria (CBN) has resumed the sale of foreign exchange to Bureau de Change (BDC) operators, as announced in a memo signed by Hassan Mahmud, Director of the Trade and Exchange Department at the apex bank.
This decision marks a reversal of the policy enacted over two years ago by the then-suspended CBN governor, Godwin Emefiele, who halted foreign exchange sales to BDC operators. The CBN’s latest action is positioned as a strategic measure to enhance liquidity and fortify the naira against market manipulations.
The memo outlines that the CBN will offer United States dollars to BDC operators at a rate of N1,301 per USD. Additionally, BDC operators are mandated to sell to customers at a margin not exceeding 1% above the purchase rate from the CBN.
Recent fluctuations have seen the naira trading as high as N1,800 to the dollar, prompting the CBN to intervene with this new directive.
In the statement, the CBN acknowledges the persistent distortions in the retail segment of the foreign exchange market, contributing to disparities in exchange rates. As part of the ongoing reforms, the CBN aims to establish an appropriate market-determined exchange rate for the naira.
The directive instructs eligible BDCs to execute Naira payments to designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment along with requisite documentation for disbursement at specific CBN branches in Abuja, Awka, Lagos, and Kano.
Amid efforts to stabilize the naira, the CBN has undertaken various reforms, including addressing FX backlog, restricting forex for foreign education and medical tourism, raising BDCs’ minimum share capital, and cracking down on FX speculators.
Author: Deborah Oyinloye
With an interest in media, Deborah aims to impart the lives of people positively.
