The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, says the Naira is grossly undervalued. Cardoso said this on Tuesday in Abuja, while presenting a communiqué from the 293rd meeting of the apex bank’s Monetary Policy Committee (MPC). as a result The Central Bank of Nigeria (CBN) has commenced the sale of dollars to Bureau De Change (BDC) in a bid to stem the free fall of the naira exchange rate. The apex bank announced this on Tuesday in a statement signed by Dr Hassan Mahmud, CBN’s Director of Trade & Exchange Department. It said $20,000 would be available to each eligible Bureau De Change (BDC) operator across the country.
The amount, according to the apex bank, is to be sold to each BDC at the rate of N1,301 per dollar, representing the lower band rate of executed spot transactions at the Nigerian Autonomous Foreign Exchange Market (NAFEM) as of the previous trading day. Mahmud said all BDCs would be allowed to sell to end-users at a margin not more than one percent above the purchase rate from CBN.
“Following the ongoing reforms in the foreign exchange market, aimed at achieving an appropriate market-determined exchange rate for the Naira, the Central Bank of Nigeria (CBN) has observed the continued price distortions at the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium. “To this end, the CBN has approved the sale of foreign exchange to eligible Bureau De Change (BDCs) to meet the demand for invisible transactions. The sum of $20,000 is to be sold to each BDC at the rate of N1,301/$- (representing the lower band rate of executed spot transactions at NAFEM for the previous trading day, as at today, 27th February 2024). “All BDCs are allowed to sell to end-users at a margin NOT MORE THAN one percent (1%) above the purchase rate from CBN. All eligible BDCs are directed to make the Naira payment to the designated CBN Foreign Currency Deposit Naira Accounts and submit confirmation of payment, with other necessary documentation, for disbursement at the appropriate CBN Branches ABUJA, AWKA, LAGOS and KANO).”
