CBN approves fx sales to BDCs at N1,101

The Central Bank of Nigeria (CBN) has approved daily sales of 10,000 dollars to about 1,588 eligible Bureau De Change operators at the rate of N1,101 to the dollar. The Director, Trade and Exchange Department of the CBN, W.J Kanya, made the disclosure in a letter addressed to the President, Association of Bureau De Change […]

The Central Bank of Nigeria (CBN) has approved daily sales of 10,000 dollars to about 1,588 eligible Bureau De Change operators at the rate of N1,101 to the dollar.

The Director, Trade and Exchange Department of the CBN, W.J Kanya, made the disclosure in a letter addressed to the President, Association of Bureau De Change Operators (ABCON) on Monday in Abuja.

According to the letter, the BDC operators are expected to sell the dollars to eligible end users at a spread of not more than 1.5 per cent above the purchase price.

It directed all eligible BDCs to effect payment of the naira deposit at CBN naira deposit account from Monday.

“All BDCs are strongly advised to continue to abide by the rules and conditions as stipulated in our earlier circulars,’’ it said.

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Recall that earlier, ABCON,  through its president, Aminu Gwadabe, called on the Central Bank of Nigeria (CBN) to further adjust its exchange rates downwards, considering the gap between market rates and rates set for BDCs.

In a letter addressed to the CBN Director of Trade & Exchange Department, Gwadabe highlighted that “While the CBN’s prescribed rate for BDCs stands at N1,251/$ (plus a 1.5 per cent margin), the parallel market rate hovers at 1,235/$.”

This discrepancy, he noted, poses challenges for BDCs in offloading currencies to retail buyers who seek cheaper rates from informal forex operators.”

In another development, International Money Transfer Operators (IMTOs) are set to commence the implementation of a directive by the Central Bank of Nigeria (CBN) to halt dollar transfers to Nigerians.

The development follows a recent directive by the apex bank, restricting the operations of IMTOs to only inbound transfers.

In its revised guidelines for the operations of IMTOs on January 31, 2024, CBN said operators will no longer facilitate money transfers from Nigeria to other countries.

The financial regulator also asked IMTOs to quote exchange rates for naira payout to beneficiaries based on the prevailing market rates at the nation’s official foreign exchange market.

Similarly, the apex bank has prohibited the use of foreign currency-denominated collaterals for naira loans.

The CBN, in a circular to all banks through Dr. Adetona S. Adedeji, Acting Director, Banking Supervision Department, said the prevalent practice has now been banned.

“The Central Bank of Nigeria has observed the prevailing situation where bank customers use Foreign Currency (FCY) as collaterals for naira loans.

“Consequently, the current practice of using foreign currency-denominated collaterals for naira loans is hereby prohibited, except, where the foreign currency collateral is:

Eurobonds issued by the Federal Government of Nigeria; or Guarantees of foreign banks, including Standby Letters of Credit

In this regard, all loans currently secured with dollar-denominated collaterals other than as mentioned above should be wound down within 90 days, failing which such exposures shall be risk-weighted 150% for Capital Adequacy Ratio computation, in addition to other regulatory sanctions.,” the circular further stated.