The Central Bank of Nigeria (CBN) has expressed concern over the continued distortions in the retail end of the foreign exchange market, which is feeding into the parallel market that has further widen the exchange rate premium.
To close the gap on the price between the official and the parallel segments of the market, the CBN said it has approved the sales of FX to eligible Bureau De Changes (BDCs) to meet the demand for invisible transactions.
In a circular that was issued on Thursday, the Central Bank said the sum of $20,000 is to be sold to each BDC at the rate of N1,450/$ (representing the lower band of the trading rate at NAFEM in the previous trading day).
“All BDCs are allowed to sell to eligible end-users at a margin NOT MORE THAN one point five percent (1.6 %) above the purchase rate from CBN,” acting director of trade & exchange department at the CBN, A. Mahdi, said in the circular.
CBN said the move was part of its ongoing reforms in the foreign exchange market with the objective of achieving an appropriate market determined exchange rate for the Naira.
According to the circular, all eligible BDCs were directed to make the Naira payment to the listed CBN Naira Deposit Account Numbers and submit confirmation of payment with other necessary documentation for disbursement at the appropriate CBN branches.
“Please be guided accordingly,” Mahdi stated.