Bureau De Change Operators were excluded from the latest forex sales by the Central Bank of Nigeria (CBN) to authorized dealers. This exclusion was confirmed by Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria, during an interview with The PUNCH.
Gwadebe stated that only banks received the forex intervention this time. He explained, “No, it is their usual intervention at the NAFEM window which presently excludes the BDCs but only banks.”
The CBN had initiated the sale of $122.67 million in forex to 46 approved dealers as part of its efforts to stabilize the foreign exchange market. Authorized dealers generally include banks and BDC operators.
Last Friday, a statement from CBN Director of Financial Markets, Dr. Omolara Duke, confirmed the new release. The statement read, “The Central Bank of Nigeria has sold the sum of $122,671,000 to 46 authorized dealers in its determination to promote stability and reduce market volatility in the foreign exchange market.”
Gwadebe previously mentioned to The PUNCH that the CBN had suspended forex supply to BDCs since March, moving towards complete liberalization of the foreign currency market, which would eliminate the need for CBN intervention. He said, “The BDC window has been suspended by the Central Bank of Nigeria since around March or so. The last time we were funded I think was around March.”
This suspension has led to the naira depreciating further to N1554/$ at the official market on Thursday.
Meanwhile, Nigeria’s external reserves increased to $35.05 billion as of July 8, 2024, marking the first time it crossed the $35 billion threshold under President Bola Tinubu’s administration.
The recent forex sales occurred on Wednesday and Thursday this week. On Wednesday, the CBN sold $67.5 million to 27 authorized dealers and purchased $2.5 million from one authorized dealer, with a bid range between N1,480/$1 and N1,500/$1. Payments for these transactions are due on July 12, 2024, following a two-day settlement cycle (T+2).
On Thursday, the CBN sold $55.17 million to 19 authorized dealers at a rate of N1,540.0/$1, with no foreign exchange purchased on that date. Payments for these spot sales are due on July 15, 2024.
The CBN emphasized that authorized dealers must ensure foreign exchange purchases from the bank are used exclusively for trade-backed transactions, which must be reported within 72 hours. The statement noted that the CBN supplies foreign exchange to the market through FX spot sales to authorized dealers using two-way quotes, aiming to improve liquidity.
Source. punch