The Central Bank of Nigeria (CBN) has initiated the fourth tranche of foreign exchange sales to Bureau De Change (BDC) operators at a rate of N1,021 per US dollar, a move aimed at stabilizing the depreciating naira. This latest intervention was confirmed in a circular dated April 22, 2024, issued to the President of the Association of Bureau De Change Operators of Nigeria (ABCON).
Despite this effort, the naira continues to weaken in the foreign exchange markets. As of yesterday, it fell to N1,300 per dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, down from N1,234.49 the previous day. Similarly, in the parallel market, the naira depreciated to N1,270 per dollar from N1,250.
In response to the ongoing currency challenges, Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, and CBN Governor, Mr. Yemi Cardoso, are set to lead a strategic discussion today. This roundtable, organized by the Abuja Chamber of Commerce and Industry (ACCI), aims to explore further measures to reinforce the naira's value.
The current forex allocation to BDCs is designed to meet the demand for minor retail transactions and mandates that each BDC can purchase $10,000 at the below-market rate established by the CBN. The central bank stipulates that BDCs must not sell the dollar to end-users at more than 1.5% above their purchase price.
This series of interventions began on February 27 when the CBN sold $20,000 to each eligible BDC at N1,301 per dollar. The initiative is part of broader efforts to correct market distortions and narrow the gap between official and parallel market rates.
The roundtable discussion hosted by ACCI and coordinated by the National Policy Advocacy Centre (PAC) will address critical issues affecting the naira and discuss strategies to enhance its stability. The forum is expected to bring together stakeholders from various sectors, including representatives from the International Monetary Fund (IMF), prominent Nigerian economists, and other financial experts.
The ACCI aims to foster a collaborative approach to bolster the local currency and reduce reliance on crude oil exports by encouraging local production and reducing import dependence. The outcomes of this roundtable are intended to inform governmental policy and promote sustainable economic strategies.
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