Bureau De Change Operators Excluded from Latest CBN Forex Sales
Bureau De Change (BDC) operators were excluded from the latest tranche of foreign exchange (forex) sales to authorized dealers.
This was disclosed by the President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadebe, in an interview with newsmen.
Gwadebe confirmed that only banks received the forex intervention, stating, “No, it is their usual intervention at the NAFEM window which presently excludes the BDCs but only banks.”
The CBN commenced sales of forex worth $122.67 million to 46 approved dealers, marking a significant step to stabilize the foreign exchange market. Authorized dealers traditionally include banks and BDC operators, but the current intervention notably excluded the latter.
In a statement released last Friday, Dr. Omolara Duke, the CBN Director in charge of Financial Markets, emphasized the bank’s commitment to promoting stability and reducing volatility in the forex market.
The statement read in part, “The Central Bank of Nigeria has sold the sum of $122,671,000 to 46 authorized dealers in its determination to promote stability and reduce market volatility in the foreign exchange market.”
Last month, Gwadebe mentioned that the CBN had suspended supply to the BDCs since March, moving towards complete liberalization of the forex market, which would minimize the need for CBN intervention.
He said, “The BDC window has been suspended by the Central Bank of Nigeria since around March or so. The last time we were funded I think was around March.”
The exclusion of BDCs in the forex sales has contributed to the depreciation of the naira, which fell to N1554/$ at the official market on Thursday.
Meanwhile, Nigeria’s external reserves increased to $35.05 billion as of July 8, 2024, crossing the $35 billion mark for the first time under President Bola Tinubu’s administration.
According to the CBN, the forex sales were conducted on Wednesday and Thursday this week. On Wednesday, the bank sold $67.5 million to 27 authorized dealers, purchasing $2.5 million from one dealer.
The bid range for these transactions was between N1,480/$1 and N1,500/$1, with payments scheduled for July 12, 2024. On Thursday, $55.17 million was sold to 19 authorized dealers at a rate of N1,540.0/$1, with payments due on July 15, 2024.
The CBN has urged all authorized dealers to ensure that forex purchases from the bank are exclusively used for trade-backed transactions, which must be reported within 72 hours.
The statement highlighted that the CBN supplies forex to the market through FX spot sales to authorized dealers using two-way quotes, aiming to enhance liquidity.
