In a significant move, the Central Bank of Nigeria (CBN) has announced the resumption of foreign exchange sales to Bureau De Change (BDC) operators across the country, marking the end of a three-year suspension.
This decision, disclosed in a new circular signed by Hassan Mahmud, the Director of the Trade and Exchange Department, comes after a prolonged halt initiated during the tenure of former CBN governor, Godwin Emefiele.
The circular outlined the allocation of $20,000 to each eligible BDC operator, aiming to address the persistent distortions in Nigeria’s retail foreign exchange market and narrow the widening gap in exchange rates.
As per CBN data, there are 5,690 registered BDC operators nationwide, of which approximately 1,373 have been screened for the allocation. The distribution breakdown includes 186 in Abuja, 26 in Awka, 376 in Kano, and 785 in Lagos.
The decision to resume forex sales to BDCs follows the discontinuation of such sales on July 27, 2021, attributed to accusations of breaching FX regulations by trading wholesale amounts exceeding $5000. Former CBN governor Emefiele had criticized BDCs for deviating from their intended objectives and facilitating corruption within the country.
The latest circular, titled “Sale of Foreign Exchange to Bureau de Change Operators to meet retail demand for eligible invisible transactions,” stipulates the sale at a rate of N1,301/$, reflecting the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market as of February 27, 2024.
Under the directive, BDCs are authorized to sell to end-users at a margin not exceeding one percent above the purchase rate from the CBN.
This resumption of forex sales to BDCs aligns with the CBN’s ongoing efforts to stabilize the exchange rate and curb the free fall of the naira. Other measures introduced include probing and clearing FX backlog, restricting forex for foreign education and medical tourism, and raising BDCs’ minimum share capital.
