CBN: Naira Picks After Apex Bank Dollar Sales To BDCs

The Naira has rebounded in value following the week-long depreciation of the Nigerian currency at both parallel and official markets.

The development followed the resumption of dollars sales to BDCs by the Central Bank of Nigeria, CBN, after months of hiatus.

The last time the apex bank sold dollars to BDC was in April this year, since then the naira has depreciated against the America Green Back, and other foreign currencies consistently.

On Thursday, the apex bank announced the sales of $20,000 to BDCs thereby reversing the sharp depreciation of the currency. The Nigerian currency was exchanged for N1,572 at the parralel market, following what financial experts described as a timely intervention by the Yemi Cardoso-led CBN.

According to the circular issued by A.A Mahdi, the Acting Director, Trade and Exchange Department of the CBN, $20,000 has been sold to registered BDCs across the country.

The bank has also directed the BDCs to sell to end users at not more than !.5 profit margin, which means that the BDCs are expected to sell at not more than N1,4 75.75 after buying for N1,450 from the apex bank.

The CBN stated:   “Following the on-going reforms in the foreign exchange market, with the objective of achieving an appropriate market determined exchange rate for the Naira, the Central Bank of Nigeria (CBN) has observed the continued distortions in the retail end of the market, which 1s feeding into the Parallel market and further widen the exchange rate premium.

“To this end, the CBN has approved the sales of FX to eligible Bureau De Change (BDCs) to meet the demand for invisible transactions. 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 Nigeria Foreign Exchange Market, 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 (1.5 %) above the purchase rate from CBN.

“All eligible BDCs are 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 — (ABUJA, AWKA, KANO and LAGOS),’ the apex bank said.