Naira appreciates as CBN sells dollars to BDCs at N1,251/$1

The Central Bank of Nigeria on Monday disclosed that it sold $10,000 to each Bureau De Change operators at a rate of N1,251 per U.S. dollar.

The bank disclosed this in a circular addressed to the President of the Association of Bureau De Change operators of Nigeria.

In the circular, signed by Hassan Mahmud, the Director of the Trade & Exchange Department, the CBN also instructed each BDCs to sell the dollars to eligible customers at a rate not exceeding 1.5 per cent above the purchase price.

“We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject wherein the CB approved a second tranche of sale of FX to eligible BDCs.

We write to inform you of the sale of $10,000 to each BDC at the rate of N1,251/$1. The BDCs are to sell to eligible end users at a spread of NOT MORE THAN 1.5 per cent above the purchase price.

“Please note that any BDC that breaches above terms shall be sanction appropriately, including outright suspension from further participation in the sale,” the circular reads in part.

It directed all eligible entities to make the naira payment to the designated CBN Naira Deposit Account Numbers before close of business on Thursday by submitting confirmation of payment, with other necessary documentation, for disbursement at the appropriate CBN branches.

The bank had in February disclosed it is resuming sales of dollars to BDCs to address the lingering price distortions affecting the naira exchange rate in the forex markets.

The decision comes after the bank said it observed continued price distortions at the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium