CBN to sell $16m to BDCs at N1,021/$ amid fresh panic in FX market

To halt the fresh panic building over the fate of the naira, the Central Bank of Nigeria (CBN) is set to disburse another tranche of liquidity intervention to 1,583 Bureau de Change operators.

Each of the prequalified BDC operators will receive $10,000, bringing the total value of the disbursement to $15.83 million.

In a letter to the President of the Association of Bureau de Change Operators of Nigeria (ABCON), the Trade and Exchange Department of the CBN said the sale of $10,000 to each of the BDC operators is aimed at meeting the demand of the retail end of the exchange market.

In the letter, which was signed by the Director of the Department, Dr Hassan Mahmud, the CBN said: “We write to inform you of the sale of $10,000 by the CBN to BDCs at the rate of N1,021/$1. The BDCs are in turn to sell to eligible end users at a spread of not more than 1.5 per cent above the purchase price.”

The CBN further hinted that all eligible BDCs are directed to commence payment of the naira deposit to the CBN naira deposit accounts from Monday, April 22, 2024, and submit confirmation of payment, with other necessary documentation, for disbursement of FX at the respective CBN branches.

By the directive, the BDCs are expected to sell at N1,036 to the dollar as against about N1,220/$ band dollar sold yesterday.

The intervention comes on the heels of fresh panic in the foreign exchange market. The sale is expected to calm the tension.

On 27 February 2924, the CBN sold dollars to the BDCs at N1,301 and they in turn sold it at a ceiling of N1,314.01/$.

On the 25 of March this year, the BDCs bought dollars at N1,251 and were authorised to sell at N1,269/$ which represents a 1.5 per cent profit margin.

Still, on 8th April 2024, the BDCs bought a dollar from the apex bank at N1,101/$ and sold it at N1,117.52/$, which was an increment of 1.5 per cent.

Yesterday, Tuesday, one British Pound was exchanged for about N1,495 at the parallel market just as the Euro went for about N1,310 while a Canadian dollar was exchanged for N885.924.