CBN Sells FX to BDCs at N1,251/$1 to Ease Naira Street Value

By Adedapo Adesanya

To further ease the street value of the Naira to the Dollar, the Central Bank of Nigeria (CBN) has issued the currency to Bureau De Change (BDC) operators at the rate of N1,251/$1.

This was disclosed in a circular addressed to the President of the Association of Bureau De Change Operators of Nigeria (ABCON), where it sold $10,000 to each BDC at the pegged rate.

In the circular, signed by Mr Hassan Mahmud, the Director of the Trade and Exchange Department, the CBN also instructed each BDC operator to sell the dollars to eligible customers at a rate not exceeding 1.5 per cent above the purchase price.

“We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject wherein the CB approved a second tranche of sale of FX to eligible BDCs.

“We write to inform you of the sale of $10,000 to each BDC at the rate of N1,251/$1. The BDCs are to sell to eligible end users at a spread of NOT MORE THAN 1.5 per cent above the purchase price.

“Please note that any BDC that breaches the above terms shall be sanctioned appropriately, including outright suspension from further participation in the sale,” the circular reads in part.

It directed all eligible entities to make the naira payment to the designated CBN Naira Deposit Account Numbers before the close of business on Thursday by submitting confirmation of payment, with other necessary documentation, for disbursement at the appropriate CBN branches.

This is expected to help ease the value of the rate on the streets as it will help keep Dollars in the system and cut down on arbitrage.

This is part of recent efforts by the apex bank to keep the Naira stronger in the face of higher FX inflows driven by increased investor interest in short-term sovereign debt following recent adjustments to benchmark interest rates.

Later today, the CBN will disclose the decisions reached at the two-day Monetary Policy Committee (MPC) meeting which started yesterday (Monday, March 25).

Source: Businesspost.ng