In order to satisfy demand for specific foreign exchange needs, the Central Bank of Nigeria (CBN) sold $15.8 million to bureau de change (BDC) operators at a rate of N1,101 per US dollar, the CBN announced on Monday.
The local currency’s recent weeklong uptrend served as background information for the top bank’s decision. The currency rate has now crept closer to the N1200 Goldman Sachs anticipated, after the naira recovered 22% in March.
In order to meet qualifying retail market demand, the central bank said in a notice that it had sold $10,000 to each of 1,588 bureau de change operators. The operators were then instructed to sell to end users at a spread of no more than 1.5% above the purchase price.
The official and parallel markets’ FX supply has increased market confidence though it appears the CBN is ramping up FX inflows at higher rate. OMO Bills sold attracted 21.13% at the primary market auction last week, a decline from 21.50% previously offered to foreign investors.
The central bank raised rates and lifted restrictions on foreign participation at its fixed-income auctions.
The naira has gained sharply against the dollar on both the official and parallel markets after suffering its second devaluation in less than a year in January. Naira Devaluation Deepens Economic Crisis in Nigeria
In the statement, CBN said 1580 BDCs get $10,000 each at N1101 with 1.5% limit on US dollar sales to invisible FX users. Bureau de Change are only allow to sell 1.5% on the subsidized FX sales to meet retail market demands.
