The Naira on Monday appreciated against the dollar at the official and unofficial foreign exchange (FX) markets as the Central Bank of Nigeria (CBN) plans to resume dollar sales to Bureau De Change (BDC) operators for the first time since July 29, 2021.
The apex bank plans to sell $40,000 weekly to Bureau de Change (BDC) operators in its latest attempt to stabilise the naira and narrow an emerging gap between the official and unofficial rates.
A document from the leadership of the BDCs seen by BusinessDay stated, “The CBN has considered our request to reinstate our operations for bidding twice a week starting from Monday, February 26, 2024. The rates, volumes, and accounts to be funded for bidding will be provided today (Monday). Collections of disbursements will be in the CBN branches in Abuja, Awka Lagos, and Kano.
“Funding is extended to Tuesday, February 27, 2024, and collections for Wednesday, February 28, 2024, for the first instance and second instance of the week to be shared tomorrow (Tuesday).”
The naira on Monday appreciated by 5.22 percent as the dollar was quoted at N1,582.94, stronger than N1,665.50 quoted on Friday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), data from the FMDQ Securities Exchange indicated.
At the parallel market, also called the black market, the naira strengthened to an average rate of N1,590 per dollar, stronger than N1,700 in the morning of the same Monday. This represents a 19.49 percent gain when compared to the N1,900 quoted on Friday.
News of the CBN’s planned intervention to boost dollar supply may have triggered gradual offloading of the greenback by some speculators, according to some traders.
The CBN has also sold about $300 million to banks since it resumed interventions in the spot market on February 13.
In response to evolving market dynamics and regulatory imperatives, the Association of Bureau De Change Operators (ABCON) convened a crucial nationwide Zoom meeting on February 25, 2024.
The outcome of the emergency session has paved the way for the implementation of comprehensive operational guidelines aimed at enhancing transparency and regulatory compliance among members.
During the meeting, the ABCON national executive council revealed a series of pivotal updates and directives designed to navigate the intricacies of the foreign exchange market.
Members of the Bureau de Change community received encouraging news as the CBN signalled the resumption of operations, allowing for bidding twice a week, effective from Monday, February 26, 2024.
A clear timeline has been established, extending funding availability until Tuesday, February 27, 2024, with collections scheduled for Wednesday, February 28, 2024, for the first instance of the week. Further details regarding the second instance will be disseminated accordingly.
In a bid to uphold operational transparency, members are required to submit daily returns for utilization by 10 am the following day, ensuring compliance with regulatory requirements.
To address potential challenges encountered during return renditions, help desks will be established in zonal headquarters, providing invaluable assistance to members in need.
ABCON, however, issued a stern warning regarding regulatory compliance, cautioning members against any infractions that could result in licence revocation and prosecution.
Specific attention was drawn to the stringent measures surrounding bulk sales and fraudulent documentation.
Members were reminded to prioritise stringent customer due diligence measures, including BVN validation and meticulous record-keeping, to mitigate the risk of fraudulent transactions.
The issuance of these operational guidelines marks a pivotal moment in the Bureau de Change sector, as stakeholders rally behind initiatives aimed at fostering transparency, accountability, and professionalism.
With a commitment to regulatory compliance and operational excellence, members aim to navigate the evolving landscape of the foreign exchange market, safeguarding the interests of stakeholders and contributing to economic stability.
