The Central Bank of Nigeria (CBN) has given the green light for the daily sale of $10,000 to approximately 1,588 eligible Bureau De Change (BDC) operators, pegged at N1,101 per dollar.
W.J Kanya, the Director of the Trade and Exchange Department at the CBN, disclosed this in a letter addressed to the President of the Association of Bureau De Change Operators (ABCON) on Monday in Abuja.
As per the directive, BDC operators must sell the dollars to eligible end-users with a spread not exceeding 1.5% above the purchase price. Additionally, all eligible BDCs must pay the naira deposit into the CBN naira deposit account starting Monday.
The CBN emphasized the importance of BDCs adhering to the rules and conditions outlined in previous circulars.
Previously, ABCON, through its president Aminu Gwadabe, urged the CBN to adjust its exchange rates further downwards, citing the disparity between market rates and rates set for BDCs.
In a communication to the CBN Director of Trade & Exchange Department, Gwadabe noted that while the CBN’s prescribed rate for BDCs is N1,251/$ (plus a 1.5% margin), the parallel market rate is 1,235/$. This gap poses challenges for BDCs in selling currencies to retail buyers seeking cheaper rates from informal forex operators.
In a separate development, International Money Transfer Operators (IMTOs) are poised to implement the CBN’s directive to cease dollar transfers to Nigerians.
This move comes following a recent directive by the CBN, restricting IMTOs’ operations to inbound transfers only.
Under the revised guidelines for IMTO operations issued on January 31, 2024, the CBN specified that operators would no longer facilitate money transfers from Nigeria to other countries. IMTOs are now required to quote exchange rates for naira payout to beneficiaries based on prevailing market rates at the nation’s official foreign exchange market.
Similarly, the CBN has prohibited the use of foreign currency-denominated collateral for naira loans.
In a circular to all banks through Dr. Adetona S. Adedeji, Acting Director of the Banking Supervision Department, the CBN declared the prevailing practice of using foreign currency as collateral for naira loans prohibited. Exceptions to this rule include Eurobonds issued by the Federal Government of Nigeria or guarantees from foreign banks, including Standby Letters of Credit.
Other than those mentioned above, all loans currently secured with dollar-denominated collateral must be wound down within 90 days. Failure to comply will result in such exposures being risk-weighted 150% for Capital Adequacy Ratio computation and other regulatory sanctions.
