CBN to restart weekly dollar sales to BDCs

In a move to strengthen the naira, the Central Bank of Nigeria (CBN) plans to resume dollar sales to Bureau De Change (BDC) operators on September 7.

The BDCs are to get $10,000 twice weekly. They are to fund their naira accounts with the dollar equivalent.

In a statement, CBN Director, Trade and Exchange Department, O.S Nnaji, said: “As part of efforts to enhance accessibility of foreign exchange particularly to travelers following the announcement of the limited resumption of international flights by the Honorable Minister of aviation commenting with Abuja and Lagos, the Central Bank of Nigeria hereby wishes to inform the general public that gradual sales of foreign exchange to licensed bureaux de change operators will commence on September 7.”

The CBN also announced the applicable exchange rate for the disbursement of International Monetary Transfer Operators (IMTOs) proceeds as IMTOs to banks, N382 to dollar; banks to can, N383 to dollar, CBN to BDCs, N384 to dollar and BDCs to end users not more than N386 to dollar.

The absence of the BDCs in the market led to rise in naira volatility, with the local currency exchanging at N379/$ at the official market. The naira exchanged yesterday at N477 to dollar at the parallel market.

The CBN suspended the sales of foreign currency to BDCs on March 27.

This follows the request made by the Association of Bureau De Change Operators of Nigeria (ABCON) for the CBN to grant them holiday as a measure to control the spread of the Coronavirus outbreak. The suspension has not been lifted since then.

However, this does not affect dollar transactions in the Investors & Exporters (I&E) window. Thus, portfolio investors, as well as businesses that still require FX for foreign transactions settlement, can access the I&E window. Several businesses currently operate minimal activities as major commercial hubs maintain restrictions in a bid to control the spread of COVID-19.

Nnaji said the purchase of foreign exchange (forex) by BDCs shall be on Mondays and Wednesdays in the first instance. The operators are to ensure their accounts with the banks are duly funded, with equivalent naira proceeds on Fridays and Tuesdays.

He said that banks will continue to sale foreign currencies for travel-related invisible transactions to customers and non-customers over the counter upon presentation of relevant travel documents.

“All banks and BDCs are advised to ensure strict compliance with provisions of extant regulations on the disbursement of foreign exchange cash to travellers, as any case of infraction will be be appropriately sanctioned.

Speaking on the new policy, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said: “It is indeed a welcome development that will strengthen the naira as BDCs remain potent monetary instrument in boosting foreign currency liquidity in the economy.

He said the funds will help support the naira restoring its dwindling fortune in the market.

“I therefore urged all our members to live up to the responsibility and justify the confidence of the CBN and our terming clients for return to sanity in the market.”


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