The Central Bank of Nigeria (CBN) has decided to provide discounted US dollar sales to Bureau de Change (BDC) operators as the exchange rate fluctuates. In the official FX market, the naira fell to N1667.42, with the exchange rate settling at N1675 per US dollar.
Both rates have already reached the central bank’s “fear index,” at which point the authority reacts with market innovation and keeps its cool in the currency markets at rates lower than these.
In a statement, the apex claimed it had permitted 20,000 US dollar sales to Bureau de Change (BDC) operators in the informal currency market at a cost of N1590, which was N77.42 at the official exchange rate on Wednesday.
In the parallel market, the naira dropped from N1,660 to close trading session at N1,675 to the US dollar as demand for invisible FX payments continues to increase.
After keeping the market participant guessing about its next move, the CBN move to boost FX liquidity to meet retail market demand for eligible invisible transaction in the parallel market.
“This is to inform the Bureau De Change (BDC) Operators and the general public that the CBN will be providing additional liquidity to this segment of the foreign exchange market.
“To this end, the CBN has approved the sale of US$20,000.00 to each eligible Bureau de Change operator at the rate of N1,590. This is to meet the demand for invisible transactions,” the apex bank said in a statement.
According to the statement, all BDCs are allowed to sell to eligible end-users at a margin of not more than one percent (1%) above the purchase rate from CBN.
