CBN Crashes Dollar, Sells 'Cheap' to BDCs, Sets New Exchange Rate For Nigerians

CBN Crashes Dollar, Sells 'Cheap' to BDCs, Sets New Exchange Rate For Nigerians

  • The Central Bank of Nigeria has once again conducted another round of dollar sales to licensed Bureau De Change Operators
  • The latest sale is part of the apex bank's efforts to ensure there is enough liquidity in the market and halt the naira's recent fall
  • To achieve its objective, the CBN has fixed an exchange rate limit for the BDCs when selling to Nigerians seeking dollars

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Central Bank of Nigeria (CBN) has announced another round of discounted dollar sales to Bureau de Change operators to stabilise the market.

According to a new circular seen by Legit.ng, the apex bank is ready to sell to licenced BDC operators $10,000 at N1,021/$1 per dollar.

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In 24 hours, naira loses N65 value against US dollar as CBN sets new exchange rate

CBN announces new rate
CBN expects BDC to sell at its fixed rate Photo credit: Bloomberg/contributor
Source: Facebook

The rate is far cheaper than the official exchange rate, which closed at N1,234.49 on Monday, April 23, 2024.

Also, a BDC trader told Legit.ng that on Monday, the naira in the parallel market sold at N1,250/$1.

CBN gives a resale rate

To achieve its objective and stop round-tripping, the CBN has instructed the 1,583 beneficiary BDCs to sell the allocated dollars to eligible customers at a rate not exceeding 1.5% above the purchase price.

This means BDCs will sell dollars to Nigerians not above N1,040 maximum.

The circular reads:

"We are writing to inform you of the sale of $10,000 by the Central Bank of Nigeria (CBN) to Bureaux de Change (BDCs) at the rate of N1,021/$1. The BDCs are then to sell to eligible end users at a spread of not more than 1.5 percent above the purchase price.

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“Naira is going back to 1900/$.” Nigerians react as naira resumes loss after massive gain

"All eligible BDCs are therefore directed to commence payment of the Naira deposit into the underlisted CBN Naira Deposit Account Numbers starting from today, Monday, April 22, 2024, and to submit confirmation of payment, along with other necessary documentation, for the disbursement of FX at the respective CBN branches."

Two new platforms identified as threats to naira

Earlier, Legit.ng reported that Nigerians identified the emergence of two cryptocurrency platforms as the reason for the recent fall of the naira.

The earlier decline of the naira was attributed to alleged market manipulation by Binance.

Nigerians have blamed the latest depreciation on new crypto exchange platforms, namely BYBIT and BITGET.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

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