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The Central Bank of Nigeria (CBN) has made its second consecutive adjustment to the exchange rate within two months in the Bureaux De Change (BDC) segment of the forex market, reducing it by 7.2 percent or N81.2 to N1,036.3 per dollar. Simultaneously, it has initiated another round of dollar sales to 1,583 eligible BDCs.
In a circular issued, the CBN disclosed its intention to sell $10,000 to each BDC at the rate of N1,021 per dollar for eligible invisible transactions. It directed BDCs to sell to eligible end-users with a maximum spread of 1.5 percent, translating to a maximum exchange rate of N1,036.3 per dollar.
Dr. Hassan Mahmud, from the Trade and Exchange Department of the CBN, conveyed the announcement, stating, “We write to inform you of the sale of $10,000 by the Central Bank of Nigeria (CBN) to BDCs at the rate of N1,021/$1.”
Eligible BDCs were instructed to commence payment of the Naira deposit to designated CBN Naira Deposit Account Numbers, effective April 22, 2024, and submit confirmation of payment along with other necessary documents for the disbursement of foreign exchange at respective CBN branches.
This marks the third instance this year where the CBN has sold dollars to BDCs, and the second time it has adjusted the BDC exchange rate.
In 2021, the apex bank suspended dollar sales to BDCs citing malpractices. However, to mitigate exchange rate distortions in the retail forex market, the CBN resumed dollar sales to BDCs on February 27th, to cater to retail demand for eligible invisible transactions.
In the first round, the CBN sold $15.7 million to 785 BDCs at the rate of N1,301/$, with directives to sell to end-users with a margin not exceeding one percent above the purchase rate, resulting in N1,314.01 per dollar.
In the subsequent round, $15.88 million was sold to 1,588 BDCs at the rate of N1,101 per dollar, with directives to sell to end-users with a spread not exceeding 1.5 percent, equating to N1,117.5 per dollar.
With the addition of $15.83 million to be disbursed to 1,583 BDCs in the third round, the CBN has injected $47 million into the retail forex market in two months. Moreover, it has reduced the BDC exchange rate by 21 percent, from N1,314 to N1,036.3 per dollar, from its initial rate of N1,313.01 per dollar.
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