CBN to resume FX sales to bureaux de change sector as airports reopen, sets BDC rates at 386 naira to a dollar

Central Bank of Nigeria (CBN) has announced on Thursday, it’s plan to resume dollar sales to retail currency operators by the end of the month, just as its airports reopen for international travel.

The central bank suspended forex sales to bureaux de change (BDC) operators in March as a coronavirus-induced lockdown cut demand for individuals with dollar expenses, to help protect the naira after a 15% devaluation prompted as an oil price crash.

It later weakened the naira in a move to unify its multiple exchange rates.

The bank said it will sell $10,000 to each of the country’s 5,000 retail currency operators on Aug. 31, according to a bank circular, down from the $20,000 each it sold to the traders.

According to a report by Reuters, BDC official said it planned to sell dollars to them twice in a week, compared to four times in the past.

Traders cannot resell dollars bought from the central bank at more than 386 naira, the circular said.

The naira traded at 477 to the dollar on the black market on Thursday, patronised by individuals with dollar expenses abroad, which is 20% weaker than where the official market quotes the currency at 386.15 naira.

The central bank resumed dollar sales to commercial banks in April in view of the gradual easing of the lockdown.

However, demand has been swelling and piling up pressure on the naira, particularly from individuals and from foreign investors that need to repatriate funds abroad.

The central bank is resuming dollar sales to individuals just as airports, which have been closed for five months, reopen for international flights.

It did not provide details on when sales to foreign investors will resume.

The bank this week rolled out new measures targeted at non-oil exporters to try to force them to process dollar proceeds through domestic lenders to increase hard currency liquidity and support the naira.

The Central Bank of Nigerian (CBN) issued a fresh set of guidelines regarding the sale of forex in the country.

According to a circular signed by O.S. Nnaji, director of trade/exchange department, CBN warned that BDCs must not exchange the naira at more than N386 per dollar.

The CBN circular reads: “Please be advised that the applicable exchange rate for the disbursements of proceeds of IMTOs for the period Monday, August 31 to Friday, September 04, 2020, is as follows:

IMTSOs to banks: N382/$1
Banks to CBN: N383/$1
CBN to BDCs: N384/$1
BDCs to end-users: Not more than N386
Volume of sale to each market is $10,000 per BDC.
“The BDCs are to ensure that their accounts with the banks are duly funded with the equivalent naira proceeds on Fridays and Tuesdays. Banks shall continue to sell foreign currencies for travel-related invisible transactions to customers and non-customers over the counter upon presentation of relevant travel documents (passport, air ticket and visa).”

About the author

Joseph Chukwuma Oputa

Joseph Chukwuma Oputa is the Managing Editor of Maslow Businessnews and Physicians News publications published by Maslow Business News Publications, Lagos, Nigeria.

Joseph Oputa is a proud Alumnus of the prestigious Nigerian Institute of Journalism, Lagos and Federal Polytechnic, Bida, Niger State.

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