Good News: CBN Crashes Dollar, Sets Exchange Rate for BDCs
- The Central Bank of Nigeria has resumed the sale of dollars to licensed Bureau De Change Operators
- The latest sale is part of the apex bank's efforts to stop the depreciation of the naira in the official and official markets
- The apex bank has set a fixed exchange rate limit for the BDCs when selling to Nigerians seeking dollars
The Central Bank of Nigeria (CBN) has conducted another round of dollar sales to licensed Bureau De Change (BDC) operators.
The move, according to the CBN, is to ensure liquidity in the retail market demand for eligible invisible transactions.
Source: UGC
According to a new circular released on Thursday, July 18, the apex bank is ready to sell $20,000 to licensed BDC operators at N1,450 per US dollar.
The rate is N131.65 cheaper than the official exchange rate, which closed at N1,581.65 on Wednesday, July 17, 2024.
Also, a BDC trader told Legit.ng that on Thursday, the naira in the parallel market sold at N1,610/$1.
CBN fixes exchange rate for BDCs
The CBN, in the circular, gave firm instructions that the beneficiary BDCs must not sell the allocated dollars to eligible customers at a rate not exceeding 1.5% above the purchase price.
This is to ensure there is no round-tripping.
The circular reads:
"In line with ongoing reforms in the foreign exchange market aimed at achieving an appropriate market-determined exchange rate for the Naira, the Central Bank of Nigeria (CBN) has noted persistent distortions at the retail market level, contributing to disparities in exchange rates and bolstering activities in the parallel market.
"To address this, the CBN has authorized the sale of foreign exchange (FX) to eligible Bureau De Change (BDCs) to fulfill demand for invisible transactions.
"Each BDC will receive $20,000 at the rate of N1,450 per US dollar (representing the lower band of the trading rate at NAFEM on the preceding trading day).
"All BDCs are permitted to sell FX to eligible end-users at a margin not exceeding 1.5% above the purchase rate from the CBN. Payments in Naira should be made to specified CBN Naira Deposit Account Numbers, and BDCs must submit proof of payment along with required documentation for disbursement at designated CBN branches in Abuja, Awka, Kano, and Lagos."
Expert speaks
Reacting to the positive outlook for an economist Kelvin Umeni said that the CBN positive outlook is possible but only depends on various economic factors.
His words:
"If the CBN can find a solution to forex liquidity issues, I strongly believe the naira will bounce back to around N1,400 per dollar by the end of the year in the official market."
New platforms identified as threats to naira
Earlier, Legit.ng reported that Nigerians identified the emergence of two cryptocurrency platforms as the reason for the recent fall of the naira.
The earlier decline of the naira was attributed to alleged market manipulation by Binance.
Nigerians have blamed the latest depreciation on new crypto exchange platforms, namely BYBIT and BITGET.
Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
