The Central Bank of Nigeria (CBN) has authorised the sale of $20,000 to eligible Bureaux De Change (BDCs).
The decision comes after the bank said it observed continued price distortions at the retail end of the market, which is feeding into the parallel market and further widening the exchange rate premium.
According to a circular on Tuesday by Hassan Mahmud, the Director of the Trade & Exchange Department at the CBN, each BDC will have access to the $20,000 at the rate of N1,301/$, representing the lower band rate of executed spot transactions at NAFEM for the previous trading day.
The CBN said all eligible BDCs must adhere to strict guidelines regarding the sale of foreign exchange to end-users.
It directed BDCs to sell to end-users with a margin not exceeding one per cent of the purchase rate from the CBN.
To facilitate the process, BDCs are required to make Naira payments to the designated CBN Foreign Currency Deposit Naira Accounts. Subsequently, they are to submit confirmation of payment along with other necessary documentation for disbursement at the designated CBN branches in Abuja, Awka, Lagos, and Kano.
According to the CBN’s recently reviewed guideline, BDCs are required to maintain detailed records of beneficiaries and the amounts sold to each recipient.
The maximum amount permitted for sale per individual is $4,000 for PTA and $5,000 for BTA.
It directed BDCs to prominently display their buying and selling rates at their outlets.
“Transactions by BDCs should only take place at approved office/outlet addresses; street hawking is strictly prohibited.
“Daily reports of Foreign Exchange sales to end-users must be submitted before 10 am the next business day on the Financial Institutions Foreign Exchange Reporting System (FIFX) portal.
“The CBN Examination team will conduct periodic spot checks on Foreign Exchange disbursements by BDCs. BDCs must uphold a high standard of professionalism and transparency in line with established guidelines. Any violation will result in immediate revocation of the BDC license,” it said.
