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CBN Resumes Sale of Dollars to BDCs

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Dollars reserve

CEM REPORT, MARKET | In a move to stabilize the naira and closing the gap between the official and black-market exchange rates, the Central Bank of Nigeria (CBN) has approved the resumption of sale of dollars to eligible Bureau De Change (BDCs) to meet the demand for invisible transactions.

This is a reversal of its decision taken 3 years ago by the former CBN Governor, Godwin Emefiele who stopped sales of dollars to BDC operators having accused the dealers of illicit forex transactions beyond their regulatory approval.

In a circular dated February 27, 2024, and signed by the Director, Trade and Exchange Department, Hassan Mahmud, the apex bank said it has observed the continuous price distortions at the retail end of the market, which is feeding into the parallel market end further widening the exchange rate premium.

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“To this end, the CBN has approved the sale of foreign exchange to eligible Bureau De Change (BDCs) to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,301/$ – (representing the lower band rate of executed spot transactions at NAFEM for the previous trading day. as at today, 27th February 2024),” the circular said.

[READ ALSO] CBN Tightens Grip on BDC Operators in Nigeria

All eligible BDCs are directed to make the Naira payment to the designated CBN foreign currency deposit Naira accounts and submit confirmation of payment, with other necessary documentation, for disbursement at the appropriate CBN Branches – Abuja, Awka, Lagos and Kano).

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