In a bid to address the lingering price distortions affecting the Naira’s exchange rate, the Central Bank of Nigeria (CBN) has authorised the sale of $20,000 to eligible Bureaux De Change (BDCs).
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.
According to a circular on Tuesday by Hassan Mahmud, the Director of the Trade & Exchange Department at the CBN, each BDC will have access to the $20,000 at the rate of N1,301/$, representing the lower band rate of executed spot transactions at NAFEM for the previous trading day.
The CBN said all eligible BDCs must adhere to strict guidelines regarding the sale of foreign exchange to end-users.
It directed BDCs to sell to end-users with a margin not exceeding one per cent of the purchase rate from the CBN.
To facilitate the process, BDCs are required to make Naira payments to the designated CBN Foreign Currency Deposit Naira Accounts. Subsequently, they are to submit confirmation of payment along with other necessary documentation for disbursement at the designated CBN branches in Abuja, Awka, Lagos, and Kano.
Guidelines
According to the CBN’s recently reviewed guideline, BDCs are required to maintain detailed records of beneficiaries and the amounts sold to each recipient.
The maximum amount permitted for sale per individual is $4,000 for PTA and $5,000 for BTA.
It directed BDCs to prominently display their buying and selling rates at their outlets.
“Transactions by BDCs should only take place at approved office/outlet addresses; street hawking is strictly prohibited.
“Daily reports of Foreign Exchange sales to end-users must be submitted before 10 am the next business day on the Financial Institutions Foreign Exchange Reporting System (FIFX) portal.
“The CBN Examination team will conduct periodic spot checks on Foreign Exchange disbursements by BDCs. BDCs must uphold a high standard of professionalism and transparency in line with established guidelines. Any violation will result in immediate revocation of the BDC license,” it said.
CBN Intervention
Meanwhile, Olayemi Cardoso, the governor of the Central Bank of Nigeria, on Tuesday said he and his team are not responsible for the existing economic woes faced by the country.
Instead, he emphasised their firm commitment to being part of the solution and working tirelessly to navigate the country out of its current predicaments.
Mr Cardoso made this statement Tuesday while briefing journalists after the Monetary Policy Committee meeting.
“I think it is very important for Nigerians to understand that (as) the Central Bank Governor — I and my team — are not responsible for the woes that we have today; we are part of the solution.
“We are determined to ensure that we work hard to get out of the mess that Nigeria is in. We assumed responsibility in a time of crisis of confidence; there was a crisis of confidence and you may all want to go to bed and wish that crisis of confidence was not there but it was, and we can’t turn back the clock.
“All we can do is do the difficult things to make a bad situation better and I do believe that the efforts that we are making are beginning to bring back confidence because, to be frank, without confidence in your business, you are not going to get far,” he said.
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