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The Central Bank of Nigeria (CBN) has excluded Bureau De Change (BDC) operators from the latest tranche of foreign exchange sales to authorized dealers. This was disclosed by Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria.
Gwadebe confirmed that only banks benefited from the forex intervention, stating, “No, it is their usual intervention at the NAFEM window which presently excludes the BDCs but only banks.”
In an effort to stabilize the foreign exchange market, the apex bank commenced sales of $122.67 million to 46 approved dealers. Traditionally, authorized dealers include both banks and BDC operators.
Last Friday, Dr. Omolara Duke, the CBN Director in charge of Financial Markets, affirmed the bank’s commitment to promoting stability and reducing market volatility in a statement. The statement read, “The Central Bank of Nigeria has sold the sum of $122,671,000 to 46 authorized dealers in its determination to promote stability and reduce market volatility in the foreign exchange market.”
Previously, Gwadebe informed The PUNCH that the CBN had suspended forex supply to BDCs since March and was moving towards a complete liberalization of the foreign currency market, which would no longer require its intervention. “The BDC window has been suspended by the Central Bank of Nigeria since around March or so. The last time we were funded I think was around March,” Gwadebe said.
This break in forex sales has seen the naira depreciate further, reaching N1554/$ at the official market on Thursday. However, Nigeria’s external reserves have increased, reaching $35.05 billion as of July 8, 2024, marking the first time it crossed the $35 billion threshold under President Bola Tinubu’s administration.
According to the CBN, the sales were conducted on Wednesday and Thursday this week. On Wednesday, the bank sold $67.5 million to 27 authorized dealers, purchasing $2.5 million from one dealer. The bid range for these transactions was between N1,480/$1 and N1,500/$1, with payments scheduled for July 12, 2024, following a two-day settlement cycle (T+2). On Thursday, the CBN sold $55.17 million to 19 authorized dealers at a rate of N1,540.0/$1, with no foreign exchange purchased on this date. Payments for these sales are due on July 15, 2024.
The CBN has urged all authorized dealers to ensure that foreign exchange purchases are used exclusively for trade-backed transactions and reported within 72 hours. The bank supplies foreign exchange to the market through FX spot sales to authorized dealers using two-way quotes, aiming to improve liquidity.
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