CBN sells FX to BDCs at N1,251/$

The Central Bank of Nigeria (CBN) has announced the second tranche of sales of foreign exchange (FX) to bureau de change (BDC) operators.

CBN disclosed this in a circular titled ‘Sales Of FX To Meet Retail Market Demand For Eligible Invisible Transactions’ and addressed to the president, Association of Bureau De Change Operators of Nigeria (ABCON) on March 25.

This development is coming nearly one month after the first announcement of sales.

On February 27, the apex bank had resumed the sale of FX to BDCs.

At the first tranche, each “eligible” BDC was allocated $20,000 at the rate of “N1,301/$ (representing the lower band rate of executed spot transactions at NAFEM for the previous trading day, as at today, 27th February 2024)”.

However, in the recent circular, signed by Hassan Mahmud, CBN director, trade and exchange department, the apex bank said the second tranche requires BDCs to sell to eligible end users at a spread of not more than 1.5 percent above the purchase price.

In the second tranche, CBN sold $10,000 to each BDC at the rate of N1,251/$.

CBN said: “We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject wherein the CBN 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.

“All eligible BDCs are directed to make the naira payment to the underlisted CBN naira deposit account numbers before close of business on Thursday March 28, 2024, and submit confirmation of payment, with other necessary documentation, for disbursement at the appropriate CBN branches.”

The apex bank also said any BDC that breaches the above terms shall be sanctioned appropriately, including outright suspension from further participation in the sale.

The rate is below the N1,431/$ the official window closed on March 22 and the N1,470/$ the parallel market traders reported on the same day.