By Uche Amunike
After months of unexpected uncertainties, the Central Bank of Nigeria (CBN) has announced, Monday, that they have sold $10,000 foreign exchange to Bureau De Change (BDC) operators at the rate of N1,251 to $1, as the Naira appreciates in value.
According to a circular which was signed by the apex bank’s Director of Trade and Exchange Department, Hassan Mahmud, to the President of the Association of Bureau De Change Operators of Nigeria, he stated that the CBN will sell foreign exchange to eligible end users at a spread of not more than 1.5% above the purchase price.
The circular read in part: ‘We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject, wherein the CB approved a second tranche of the sale of FX to eligible BDCs.’
‘We write to inform you of the sale of $10,000 to each BDC at the rate of N1,251/$1. The BDCs are to sell to eligible end users at a spread of not more than 1.5 per cent above the purchase price.’
They warned that ‘any BDC that breaches the above terms shall be sanctioned appropriately including outright suspension from further participation in the sale.’
The country is facing rising inflation, forex crisis, food inflation, economic hardship, including high cost of living which is occasioned by the removal of petrol subsidy. This has led to protests in different parts of the country, especially as the purchasing power of the naira and the disposable income of common Nigerians shrink amid the forex crisis and inflation.
In the past nine months, the Nigerian Naira has suffered a decline, especially after the President Tinubu administration collapsed the foreign exchange window. This brought about a hike in prices of commodities which skyrocketed to as high as double as the Nigeria Naira experienced an all time low, as it was seen falling from about 700 naira per dollar last May to about N2000 naira per dollar, last month, before it gradually started to appreciate in March.
Currently, the authorities clamped down on cryptocurrency websites like Binance, with accusations of speculation. They have turned their focus on them, clamping down on them through telecommunication companies.
The CBN has also tried to control the value of the failing Naira, by revoking the licenses of 4,173 BDCs, over failures of compliance, on March 1, 2024. In February, the apex bank also raised minimum capital requirements for BDC operators in the country to N2bn for Tier 1 license holders and N500m for Tier 2 license holders.
The new CBN governor, Olayemi Cardoso, is expected to make known, the new fiscal and monetary policies that will shape the country’s economy, under his watch. He’s expected to do this on Tuesday, March 26, 2024, which is when the Monetary Policy Committee would hold.
Recall that the Monetary Policy Committee raised the country’s interest rate of 18.75% to 22.75% in February, to stem the rising inflation that stood at 31.7% as of February.
