In line with its resolve to achieve a rate convergence, the Central Bank of Nigeria (CBN) on Tuesday lowered the rate at which dollar inflows from International Money Transfer Operators (IMTOs) are sold to Bureau De Change (BDC) operators to N360/$1, from N381/$1.
With this directive, BDCs are now expected to sell the greenback to retail end-users at not more than N362/$1, lower than N400/$1 it was sold in this segment of the market.
This emerged barely 24 hours after the central bank directed commercial banks in the country to sell FX obtained from it to retail end-users at not more than N360/$1 for invisibles.
CBN acting Director of Corporate Communications, Isaac Okorafor, confirmed the new directive.
Okorafor said the objective of the new FX policy was to ensure a convergence of the rates in the interbank and BDC segments, stressing that the CBN remained committed to ensuring transparency in the market, as well as fairness to end-users, many of whom hitherto experienced challenges in accessing foreign exchange.
He urged licensed BDCs to play by the rules, cautioning that the CBN would not hesitate to sanction any erring dealer.
The CBN spokesman also disclosed that the sum of $100 million offered to authorised forex dealers in the interbank wholesale window to meet the requests of wholesale customers was fully subscribed on auction on Tuesday.
Okorafor also reiterated his call to all stakeholders to play their respective roles in the smooth running of the FX market for the benefit of the Nigerian economy.
Commenting on the new FX rate for BDC operators, the President, Association of Bureau De Change of Nigeria (ABCON), Mr. Aminu Gwadabe, expressed satisfaction with the directive.
“We are happy about it because it is the right step to harmonise the various rates in the market that have been affecting our operations. Now that the harmonisation has been achieved, we are sure that the naira will gain strength.
“We expect that the parallel rate will appreciate to about N370 to a dollar in the coming days,” Gwadabe said in a phone interview.
On his part, the acting Managing Director, Afrinvest Securities Limited, Mr. Ayodeji Ebo, said lowering the rate for BDCs showed that the intervention by the CBN was yielding the desired results.
“It is now pointing to a direction: the CBN may converge the rate at N360/$1. But to consolidate the gain, I think the CBN needs to move the benchmark band for interbank rate from its current rate to somewhere close to N360/$1 to help conserve external reserves.
“By doing that, it will send a positive signal to foreign investors who are still sitting on the fence, because the CBN is not expected to remain the sole supplier of foreign exchange.
“We also feel the CBN needs to look at corporate investors who want to take out their funds that are still trapped and see how to support then. So, lowering the rate for BDCs is good news for retail FX end-users,” Ebo added.
The naira traded at N380 to the dollar at some parallel market points in Lagos on Tuesday.
Also, external reserves stood at $30.340 billion as of last Friday, down from $30.489 billion last Thursday.
Meanwhile, following concerns that banks with so much dollars for retail invisibles in their vaults might incur losses following Monday’s directive that the adjustment of the exchange rate by the CBN for PTA, BTA and medical fees should be implemented immediately, a senior banker on Tuesday allayed any apprehension.
The banker, who did not want his name on print, explained that when his bank communicated the new policy to its customers, it informed them that although the central bank had said that the new rate of N360/$ for PTA and others should be implemented with immediate effect, its implementation would depend on when the sale of dollars bought at a higher rate is exhausted.
The source, who confirmed that as a result of the sustained intervention by the CBN, banks were now awash with dollars for retail invisibles, added: “Banks would now have to be marketing more for retail end-users. The table has now turned. Previously the customers were the ones chasing the banks for dollars.”