The Central Bank of Nigeria (CBN) may allocate up to $110.81 million this year to provide foreign exchange (FX) to eligible Bureau De Change (BDCs).
This estimate is based on the approved 1,583 BDC operators and the recent circulars released by the CBN concerning FX sales.
Since lifting the suspension of FX sales to BDCs in early 2024, the CBN has conducted five FX sales, offering a total of $70,000 between February and July 2024.
In February 2024, the first sale saw $20,000 allocated per BDC at a rate of N1,301/$1, amounting to $31.66 million.
The second sale reduced the allocation by 50%, selling FX at N1,251/$1, totaling $15.83 million. In April 2024, there were two sales of $10,000 each, at rates of N1,101/$1 and N1,021/$1, respectively, also totaling $31.66 million. On July 18, 2024, the CBN announced another sale of $20,000 per BDC at N1,450/$1, amounting to $31.66 million.
This brings the total expected expenditure to $110.81 million if all BDCs participate in these sales.
The CBN’s actions come after the revocation of licenses of over 4,173 BDC operators in February 2024, following a prolonged suspension since 2021. The latest sale at N1,450/$1, the highest rate yet, indicates ongoing pressure on the naira, which is nearing N1,600/$1. CBN Governor Yemi Cardoso has emphasized minimal and targeted interventions in the BDC segment to ensure effective market integration.
In addition to BDC sales, the CBN has been active in the official market. In May 2024, the naira saw significant appreciation due to the CBN’s increased dollar sales, including a $1.3 billion non-deliverable forward (NDF) maturing on May 29, 2024. Recently, the CBN sold $122.67 million to 46 authorized dealers to stabilize the market and curb volatility, as the naira hit its lowest level since March 2024.
The CBN’s ongoing efforts to manage FX sales and stabilize the naira underscore the challenges faced in maintaining market equilibrium amidst fluctuating exchange rates and economic pressures.
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