Forex Sales by CBN to BDCs at N1,251/$1 Coincide With Naira Rebound
On Monday, the Central Bank of Nigeria (CBN) announced that it will sell $10,000 to all qualifying Bureau de Change (BDC) operators in the country at a rate of N1,251/$1. This comes as the naira progressively rises against the dollar following months of unpredictable uncertainties.
On Monday, the central bank informed the head of the Nigerian association of bureau de change operators that the BDCs should sell to qualified buyers at a margin of no more than 1.5 percent above the acquisition price.
Bank Director of Trade and Exchange Department Hassan Mahmud signed the circular.
There will be “appropriate sanctions, including outright suspension from further participation in the sale,” for “any BDC that breaches the aforementioned terms,” according to the CBN’s warning.
Protests have broken out in various parts of Nigeria as a result of the naira’s declining purchasing power and the dwindling disposable income of ordinary Nigerians brought on by the country’s ongoing struggles with food inflation, the forex crisis, economic hardship, and the high cost of living caused by the elimination of petrol subsidies.
Since President Bola Tinubu’s administration closed the foreign exchange window nine months ago, the value of the Nigerian naira has declined. The naira hit a record low in May, plunging from almost N700/$1 to about N2,000/$1 last month, before gradually appreciating in March, causing commodity prices to soar to as high as double their original levels.
Since then, the government has shifted its attention to bitcoin exchanges like Binance, claiming that the sites engage in speculation and imposing restrictions on them through telecommunications providers.
In an effort to stabilise the faltering naira, the central bank withdrew the licences of 4,173 BDCs on March 1, 2024, due to noncompliance. Tier 1 licence holders were required to have a minimum capital of N2 billion in February, while Tier 2 licence holders were required to have a minimum capital of N500 million. These figures were set by the bank.
At Tuesday, March 26, 2024, the 294th meeting of the Monetary Policy Committee will be held by the Central Bank of Nigeria (CBN). New chief executive officer Olayemi Cardoso took office in September and is expected to announce new fiscal and monetary policies that will influence the country’s economy.
Inflation reached 31.7% in February, prompting the MPC to hike the interest rate from 18.75% to 22.75% in an effort to slow the country’s rapid economic growth.