CBN Removes Peg on Dollar Supply to BDCs
|CBN Governor, Sanusi Lamido Sanusi
Desirous of ensuring exchange rate stability as well as narrowing the gap between the official and parallel segments of the foreign exchange (forex) markets, the Central Bank of Nigeria (CBN) Friday removed the restriction placed on forex supply to Bureaux De Change (BDC) operators from autonomous sources.
Dealers said the development would reduce the cost of importation in the country. A circular by the apex bank titled: "Foreign Exchange Cash Sales to BDCs by Banks," signed Mrs. O.L Ahuchogu, on behalf of the CBN Director, Trade and Exchange Department, posted on the CBN’s website Friday, revealed that the liquidity management office has approved the removal of the limit of $1 million as maximum amount that can be sold to BDC operators from autonomous funds weekly.
The CBN had in a circular last week, increased supply of the United States Dollar from each authorised dealer to BDC operators from $500,000 per week to $1 million per week. It had following complaints from dealers and end-users, raised supply from $250,000 per week to $500,000 per week on July 28.
The latest circular addressed to all authorised dealers and BDC operators explained: "Following the review of developments in the forex market and the need to stabilise the exchange rate, authorised dealers are hereby informed that management has approved the removal of the limit of $1 million as maximum amount that can be sold to BDC operators from autonomous funds, weekly." It however warned all authorised dealers to ensure compliance and also render returns to the regulator.
"For the avoidance of doubt, authorised dealers and BDC operators are enjoined to ensure compliance and render appropriate returns, as any contravention shall attract appropriate sanction. This circular supersedes earlier circular dated August 12," it added. While the Naira stood at N151 to a dollar at the official market Friday, it closed at N164 to a dollar at the parallel market.
Commenting on the development, Managing Director and Chief Executive, Slamad Bureaux De Change Limited, Mr. Amaeze Olisaemeka, said the new policy would strengthen the value of the Naira.