The Central Bank of Nigeria (CBN) has announced the commencement of sales of foreign exchange worth $20,000 to eligible Bureau De Change operators across the country.

This was stated in a circular issued and signed by the Director, Trade and Exchange Department, Hassan Mahmud, on Tuesday.

According to him, 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 CBN, therefore, mandated all the Bureau De Change operators to sell at a margin not more than one per cent (1 per cent) above the purchase rate.

The circular, titled “Sale of Foreign Exchange to Bureau de Change Operators to Meet Retail Demand for Eligible Invisible Transactions,” stated that the move aimed to correct the persisting distortions in Nigeria’s retail foreign exchange market and bridge the widening exchange rate gap.

It stated that the allotment will be sold at a rate of N1,301/$, which reflects the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market on the preceding trading day.

The circular read, “Following the ongoing reforms in the foreign exchange market, aimed at achieving an appropriate market-determined exchange rate for the Naira, the Central Bank of Nigeria has observed the continued price distortions at the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.

“To this end, the CBN has approved the sale of foreign exchange to eligible Bureau De Change 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 of today, 27th February 2024).

“All BDCs are allowed to sell to end-users at a margin NOT MORE THAN one per cent (1 per cent) above the purchase rate from CBN.”

It further directed eligible BDCs to make Naira payments to the designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment, with other necessary documentation.

“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,” it added.