The Central Bank of Nigeria (CBN) has decided to sell $20,000 more to each eligible Bureau de Change (BDC) operator in Nigeria.
This announcement was made on September 25, 2024, in a circular signed by Dr. W.J. Kanya, the Acting Director of CBN’s Trade & Exchange Department.
As per the circular, CBN approved the sale of $20,000 per eligible BDC at a rate of N1,590 per US dollar. This is N10 higher than what BDCs got earlier this month.
CBN Limits BDCs Profit Margins
The circular also says that BDCs can sell this foreign exchange to eligible users at a margin of no more than 1% above CBN’s rate. CBN wants to make sure BDCs don’t make too much profit.
- Eligible BDCs must pay in naira to their CBN deposit accounts.
- They need to submit the payment confirmation and related documents at designated CBN branches to get the $20,000.
- The circular stated: “This tells BDC Operators and the public that CBN is adding more money to the foreign exchange market.“
- “So, CBN approved the sale of $20,000 to each eligible BDC at the rate of N1,590 per dollar. This is to meet the demand for various transactions.”
- “BDCs can sell to eligible users at no more than 1% above CBN’s purchase rate.”
- “Eligible BDCs should deposit naira payments to CBN accounts. They should also submit payment confirmation and necessary documents at CBN branches in Abuja, Awka, Kano, and Lagos to collect the $20,000.”
What You Should Know
This step by CBN aims to add more foreign exchange liquidity in the retail market, mainly for personal and business transactions called invisible transactions.
- Invisible transactions mean services and intangible items like education fees, medical expenses abroad, or travel allowances, not involving physical goods crossing borders.
- This is the second time this month CBN is selling foreign exchange to BDCs, making it the seventh sale this year.
- With 1,583 approved BDC operators, this move may cost CBN up to $63.32 million this month for these two sales.