CBN Begins $20,000 Per Week Sales To BDCs Sept. 7

The Central Bank of Nigeria (CBN) has approved September 7 as resumption date for dollar sales to Bureau De Change (BDC) operators.

The BDCs will be getting $10,000 twice per week (Mondays and Wednesdays) allocations and are expected to fund their naira accounts with the dollar equivalent. 

CBN Director, Trade and Exchange Department, O.S Nnaji, said in a circular to baks and authorized dealers: “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 CBN, 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 to dollar  at the official market. The naira yesterday  exchanged at N477 to dollar at the parallel market.

The CBN had in March 27,  suspended the sales of foreign currency to BDCs.  Nnaji said the purchase of foreign exchange by BDCs shall be on Mondays and Wednesdays in the first instance. The BDCs are to ensure that 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 travelers, 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,” he said.

ABCON had in early March asked the CBN to grant BDCs two-week 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.