Central Bank Sells Forex to BDC Operators at N1,450/$1

By Aduragbemi Omiyale

In a bid to stabilize the foreign exchange (FX) market, the Central Bank of Nigeria (CBN) has sold forex to some eligible Bureaux De Change (BDC) operators.

This is coming a few days after the apex bank sold FX worth $123 million to 46 authorised dealers, which the president of the Association of Bureaux De Change Operators of Nigeria (ABCON), Mr Aminu Gwadabe, said were mainly commercial banks.

In a statement signed on Thursday by the acting director of the CBN’s Trade and Exchange Department at the CBN, AA Mahdi, it was disclosed that the dollars were given to the forex dealers at N1,450/$, far below the previous day’s official market rate, warning them to sell to eligible end-users at a margin not more than 1.5 per cent above the purchase rate.

Business Post reports that on Wednesday, the Naira lost 0.32 per cent or N4.95 against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) to close at N1,581.65/$1 compared with the preceding trading day’s value of N1,576.66/$1.

In the parallel market yesterday, the domestic currency depreciated against the United States currency by N30 to quote at N1,615/$1 compared with Tuesday’s closing price of N1,585?41.

In the statement issued today, the CBN explained that the latest intervention was mainly for the BDCs to “meet the demand for invisible transactions.”

It disclosed that, “The sum of $20,000 is to be sold to each BDC at the rate of N1,450/$ (representing the lower band of the trading rate at NAFEM in the previous trading day).”

According to the central bank, there have been “continued distortions in the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.”