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HomeBanking & FinanceNaira WatchNaira sustains rally as CBN sells $15.88m to BDCs at N1,101/$

Naira sustains rally as CBN sells $15.88m to BDCs at N1,101/$

In a major push to sustain ongoing rally of the naira at both official and parallel markets, the Central Bank of Nigeria (CBN) on Monday sold $15.88 million to 1,588 eligible Bureaux De Change (BDCs).

A circular to all authorised dealers, signed by CBN Director, Trade and Exchange Department, Dr.  W.J Kanya slashed the dollar selling rate to BDCs to 1,101 to dollar. The BDCs are to sell at 1.5 per cent margin above the purchase rate.

Kanya said each of the eligible 1,588 BDCs will access $10,000 each BDC at N1,101 to dollar.

The previous dollar purchase rate for BDCs was at N1,251/$ and was far above the N1,240/$ naira closed last week.

The Association of Bureaux De Change Operators of Nigeria (ABCON) the umbrella body of all Central Bank of Nigeria (CBN)-Licensed Bureaux De Change (BDCs) had at the weekend, appealed to the Apex Bank to adjust and lower its applicable Exchange Rate downward below the N1,251/$ its pegged for the BDCs.

National President, Alhaji (Dr.) Aminu Gwadabe, insisted that naira’s speedy recovery, which was faster than expected had made CBN’s selling rate to BDCs very expensive and difficult to offload to retail end buyers that are trooping to the undocumented forex operators for cheaper rates and avoiding the BDCs services

He insisted that with naira appreciating across markets, many BDCs who bought dollar at N1,251/$ will lose significant income and capital if they sale at the current open  market rate of N1,235/$ and therefore the  need for the call for a further review downward of the applicable exchange rate for the period and subsequently to continue to enhance naira sovereignty.

“We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$ with a margin of 1.5% are yet to receive their disbursement. This is happening in the face of prevailing open market rate of N1,235/$ which is lower than the authorised applicable exchange rate by the CBN to the BDCs,” Gwadabe said.

Kanya wrote: “We write to inform you of the sale of $10,000 by the Central Bank of Nigeria (CBN) to BDCs at the rate of N1101/$1. The BDCs are in turn to sell to eligible end users at a spread of NOT MORE THAN 1.5 percent above the purchase price.

“All eligible BDCs are therefore directed to commence payment of the Naira deposit to the underlisted CBN Naira Deposit Account Numbers from Today Monday April 08, 2024, and submit confirmation of payment with other necessary documentation for disbursement at the appropriate CBN Branches’.

“All BDCs are strongly advised to continue to abide by the rules and conditions as stipulated in our earlier letters/circulars.”

The current selling rate to BDCs is expected to further crash the naira at both official and parallel markets.

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