The commercial banks and BDC operators will now buy the United States dollar at N357 per dollar to sell N360 with a positive margin of N3 per dollar.
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CBN said the decision was aimed at giving BDCs a level playing field to enable them to compete favourably with other authorised foreign exchange dealers.
- Analyst told Business Insider Sub-Saharan Africa that the review was to further narrow down the market premium.
- Nigerian naira appreciated to N361 to a dollar from N363 at the parallel market following the announcement
The Central Bank of Nigeria (CBN) has reduced the selling rate of foreign exchange to Bureaux de Change operators at N357 per dollar to further narrow down pressure on naira.
By implication, the banks and BDC operators will now buy the United States dollar at N357 per dollar to sell N360 with a positive margin of N3 per dollar.
Before now, BDCs bought the greenback from the central bank at N360 and sold same at N362, N363 to the dollar depending on demand.
Isaac Okorafor, CBN acting director, corporate communications, made this known in a statement released on Monday, June 4, 2018.
Okorafor said the decision was aimed at giving BDCs a level playing field to enable them to compete favourably with other authorised foreign exchange dealers.
He urged BDC operators to abide by the new guidelines and not seek to exploit eager customers by selling above the N360 band, just as he warned that erring BDCs will be sanctioned in any case of infraction established against them.
Omotola Abimbola, fixed income and currency specialist at Ecobank Research told Business Insider Sub-Saharan Africa that the review is to further narrow down the market premium.
“The CBN main objective is to cater for summer and election spending.”
“There are sizeable external reserves for the CBN to cater for all these, so no panic.”
Also READ: Now you can get Nigerian Naira at N360 per dollar at any bank, here's how
Nigeria naira at the parallel market
The naira gained N2 to close at N361 on the parallel market, higher than the N363 at which it sold last Friday.
On the Investors’ and Exporters’ window, the naira also gained marginally to close at N361.32 to a dollar Monday.
It closed flat at N306 at the CBN window, the official pegged rate.
CBN policy on the forex market
The Central Bank of Nigeria at the end of its monetary policy committee meeting in May 2017, said it is working to see the convergence of rates at the foreign exchange market.
Godwin Emefiele, CBN governor, had said that the apex bank was optimistic that the rate between the official and parallel market would converge further with its intervention policies.
Ahead of summer and election spendings, the Central Bank of Nigeria (CBN) last week, directed financial institutions to make foreign exchange available to customers over the counter to allow travellers have easy access to dollars.
The apex bank also mandated all Bureaux de Change (BDCs) to access dollars from the CBN on Mondays, Wednesdays and Fridays every week.