In a bid to stabilize the foreign exchange market and curb distortions, the Central Bank of Nigeria (CBN) has announced the commencement of weekly sales of $15.7 million to 785 registered Bureaux de Change (BDCs) across Nigeria.

Under the new arrangement, each of the 785 BDCs will receive $20,000 at the rate of N1,301 per dollar. The directive, disclosed by Dr. Hassan Mahmud, Director of the Trade and Exchange Department at the CBN, aims to address the prevailing price distortions in the retail end of the market, consequently reducing the parallel market premium.

The CBN emphasized that BDCs are mandated to sell the dollars to end-users with a margin not exceeding 1% of the purchase price. This move underscores the ongoing reforms in the foreign exchange market, aligning with the goal of achieving a market-determined exchange rate for the Naira.

Furthermore, the CBN released guidelines for the sale of dollars to BDCs, including restrictions on the sale of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) to $4,000 and $5,000 per individual, respectively. BDCs are required to maintain transparent records of beneficiaries and amounts sold, display buying and selling rates at their outlets, and refrain from street hawking.

The CBN has also announced plans for periodic examinations of foreign exchange disbursements by BDCs to ensure compliance with stipulated guidelines. Any breach of regulations will result in the immediate revocation of the BDC license.

Credit: Vanguard