The Central Bank of Nigeria (CBN) has excluded Bureau De Change (BDC) operators from the latest tranche of foreign exchange sales, directing the intervention exclusively to authorized banks. This development was confirmed by Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria.
Gwadebe explained that the intervention was conducted through the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, which currently excludes BDCs. “No, it is their usual intervention at the NAFEM window which presently excludes the BDCs but only banks,” Gwadebe stated.
The CBN initiated the sale of $122.67 million to 46 approved dealers as part of efforts to stabilize the foreign exchange market. Authorized dealers include banks and previously, BDC operators.
A statement from Dr. Omolara Duke, the CBN Director of Financial Markets, highlighted the bank’s commitment to promoting stability and reducing volatility in the foreign exchange market. “The Central Bank of Nigeria has sold the sum of $122,671,000 to 46 authorized dealers in its determination to promote stability and reduce market volatility in the foreign exchange market,” the statement read.
Last month, Gwadebe noted that the CBN had suspended forex supply to BDCs since March, indicating a move towards a fully liberalized foreign currency market that would not require CBN intervention. “The BDC window has been suspended by the Central Bank of Nigeria since around March or so. The last time we were funded I think was around March,” Gwadebe said.
This suspension contributed to the naira’s depreciation, reaching N1554/$ at the official market on Thursday. Despite this, Nigeria’s external reserves have increased, hitting $35.05 billion as of July 8, 2024, the first time crossing the $35 billion mark under President Bola Tinubu’s administration.
The recent forex sales occurred on Wednesday and Thursday, with the CBN selling $67.5 million to 27 authorized dealers and purchasing $2.5 million from one dealer on Wednesday. The bid range was between N1,480/$1 and N1,500/$1, with payments scheduled for July 12, 2024. On Thursday, $55.17 million was sold to 19 authorized dealers at a rate of N1,540/$1, with payments due on July 15, 2024.
The CBN has emphasized that all foreign exchange purchases must be used for trade-backed transactions and reported within 72 hours, aiming to improve market liquidity through FX spot sales to authorized dealers using two-way quotes.
