Naira Rises by N70 As CBN Opens Dollar Tap for BDC Traders
- The naira has improved further against the United States dollar in the parallel market
- The gains recorded follow the CBN's decision to allow BDCs to access up to $150,000 weekly through authorised banks
- ABCON President Aminu Gwadebe said the policy has narrowed the gap between official and parallel rates
Legit.ng journalist Dave Ibemere is an experienced business journalist with in-depth knowledge of the Nigerian economy, stock market, and general market trends.
The Nigerian naira strengthened to between N1,425 and N1,430 per dollar at the parallel market on Thursday, February 12, following a Central Bank of Nigeria (CBN) directive allows Bureau De Change (BDC) operators to access foreign exchange from the official market.
When compared to the rate of N1,500 dollar was sold some weeks ago analysts say the move is narrows the gap between official and open market rates
Source: Getty Images
The president of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadebe, described the policy shift as a major boost for the retail foreign exchange segment, noting that early signs point to increased stability and improved liquidity conditions.
He said:
“This is very good news for us. Even before full implementation, we have already seen positive improvements in the exchange rate dynamics.
The gap between the official and the parallel market used to be as wide as N84 to a dollar, but we have seen that margin reduce significantly to around N30 or N40. That level of convergence gives confidence that the market is moving toward stability.
“As of the time I left the office, the open market rate is around N1,425 to N1,430 to the dollar, and it has been trending downward. The dollar is falling in the parallel market because liquidity is improving and confidence is returning. The structure the CBN introduced allows us to access the official window transparently through banks.”
CBN opens door for BDC operators to buy dollar
In a circular on Tuesday, February 12, the CBN said BDCs are permitted to access up to $150,000 weekly through authorised dealer banks, which execute purchases from the official market on their behalf.
The policy effectively reintegrates BDCs into the formal FX supply chain, Punch reports.
The CBN Director of the Trade and Exchange Department, Dr Musa Nakorji, who signed the circular, said that the move was aimed at improving foreign exchange liquidity in the retail segment of the market and meeting the legitimate needs of end users.
Economist Ayo Teriba said the development forms part of broader monetary and external sector reforms that are already yielding macroeconomic gains, particularly in reserve accretion and exchange rate stability.
He explained:
“With reserves at $30bn, Nigerians should be confident that exchange rate stability is here to stay. "
Source: Getty Images
CardinalStone’s daily market update showed the naira rose 0.70% to close at N1,435 per dollar.
The CBN also mandated that all licensed BDCs submit accurate electronic reports on time, following existing regulations.
CBN confirms 82 licensed BDCs
Legit.ng earlier reported that the CBN has released the full list of 82 Bureaux De Change (BDCs) approved under its revised regulatory framework.
The apex bank urges Nigerians to transact only with authorised forex dealers.
According to the apex bank, only operators listed on its official website are recognised as being authorised to conduct BDC business in Nigeria.
Source: Legit.ng
