The Central Bank of Nigeria resumed selling US dollars to money changers to address the falling value of the naira. This decision came after the naira-to-dollar exchange rate dropped to a low of NGN1,639 per dollar, likely due to increased demand for US dollars for travel and business. The central bank has outlined rules for money changers participating in this program, including a one percent markup on the purchase price and designated locations for submitting applications.
Nigeria Resumes Dollar Sales to Money Changers Amid Naira's Decline
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Nigeria’s Persistent Forex Shortage
On Sept. 6, the Central Bank of Nigeria (CBN) resumed selling U.S. dollars to Bureau de Change (BDC) operators to meet retail demand for eligible invisible transactions. The bank said qualifying BDCs would be offered $20,000 at an exchange rate of NGN1,580 for one dollar.
According to a report, the Nigerian central bank’s latest intervention came after the naira-dollar exchange rate dropped to NGN1,639. Nigerian observers have attributed the currency’s plunge to the increased demand for U.S. dollars by wealthy residents taking vacations and businesses.
As previously reported by Bitcoin.com News, the CBN took a similar step in July after the naira hit what was then an all-time low. However, at the time, the CBN sold U.S. dollars to BDCs at NGN1,450 while authorized-dealer banks were offered over $100 million at rates ranging between NGN1,498 and NGN1,530. Before that, the CBN had injected more than $80 million in May.
Meanwhile, in a statement, the CBN laid out the rules BDCs applying for this service must adhere to.
“All BDCs are allowed to sell to eligible end-users at a margin of not more than 1% above the purchase rate from the CBN. BDCs interested in this transaction are directed to make the naira payment to the CBN Deposit Account Numbers,” the CBN stated.
The central bank also directed interested BDCs to submit their documents at its branches in Abuja, Aba, Kano, and Lagos.
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