CBN to resume Forex sale to BDCs as naira slumps at parallel market
August 28, 2020Oladeinde Olawoyin
Central bank of Nigeria (CBN)
Central bank of Nigeria building
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The Central Bank of Nigeria (CBN), on Thursday, announced that it will resume the gradual sale of foreign exchange to licensed Bureau De Change operators.

In a statement signed by O.S. Nnaji, director of trade and exchange department, the apex bank said forex sales will commence with effect from September 7.

The bank said the move is part of efforts to enhance accessibility to foreign exchange particularly by travellers.

“As part of efforts to enhance accessibility to foreign exchange particularly to travelers following the announcement of the limited resumption of international flights by the Honourable Minister of Aviation commencing with Abuja and Lagos, the Central Bank of Nigeria hereby wishes to inform the General Public that gradual sales of foreign exchange to licensed BDC operators will commence with effect from September 07, 2020,” the circular said.

“Consequently, purchase of foreign exchange by BDCs shall be on Mondays, and Wednesdays in the first instance,” it added.

The apex bank noted that BDCs are to ensure that their accounts with the banks are duly funded with the equivalent Naira proceeds on Fridays and Tuesdays accordingly.

“Meanwhile, Authorised Dealers (deposit money banks) shall continue to sell foreign currencies for travel related invisible transactions to customers and noncustomers over the counter upon presentation of relevant travel documents (passport, Air ticket & Visa),” Mr Nnaji said.

“All Authorised Dealers and Bureau De Change Operators are hereby advised to ensure strict compliance with the provisions of the extant regulations on the disbursement of foreign exchange cash to travellers, as any case of infraction will be appropriately sanctioned.”

Suspension
In March, the CBN had suspended foreign exchange sales to Bureau De Change (BDC) operators.


In a letter dated March 25, the CBN noted that the suspension followed the government’s directive to restrict gatherings to not more than 20 persons as part of measures aimed at reducing person-to-person contact and curbing the transmission of the coronavirus (COVID-19).

ABCON had earlier on March 24 written to the apex bank, recommending a halt in the weekly sale of forex to the BDCs.

This was after the apex bank announced that dollar be sold by BDCs to end-users at N380 to a dollar from the initial N360 to a dollar.

Earlier, the CBN had collapsed the multiple exchange rate policy that determined the value of the naira and adopted a single exchange rate.

The bank adopted a uniform rate for the official rate, bureau de change operators, importers and exporters, amongst others.

According to the CBN, IMTSOs to banks will be at N376 per dollar, banks to CBN N377 per dollar, CBN to Bureau de change operators N378 per dollar, BDCs to end-users should not be more than N380 per dollar and the volume of sales for each market is $20 thousand per BDC.

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While the CBN said resumption of sales to BDCs is necessitated by the proposed plan to resume international flight operations, the Nigerian government has postponed the resumption of international flights.

The government said it postponed the resumption to ensure all essential things were put in place.


International flights, earlier scheduled to resume on August 29, will not commence on September 5.

Weak Naira
Meanwhile, checks by PREMIUM TIMES on Thursday showed that the naira weakened against the United States dollar for the most part of the week.

Data obtained by this newspaper showed that the naira sold at N477 against a (United States’) dollar in the parallel market on Thursday.

Further analysis showed that the Nigerian currency has retained the same N477/$1 value since last Monday. It was however bought at N472 in the parallel market on Thursday.

In the same vein, while the naira was valued at N615 against the British pound, it sold for N555 against the Euro up until press time Friday morning.