CBN Issues new limit for sale of foreign exchange cash to BDC

The Central Bank of Nigeria, CBN on Tuesday, set a new limit of $30, 000.00 per week for the sale of foreign exchange cash from the Authorized Dealers, ADs to Bureaux de Change, BDCs, just as the Naira depreciated to N350 per dollar.

The apex bank also warned Authorized Dealers to refrain from accessing its Discount Window on the settlement date for government securities’ auctions.
The securities are CBN Bills, Nigerian Treasury Bills and Federal Government of Nigeria Bonds. The warning, according to the CBN Circular Ref: FMD/DIR/GEN/CIR/07/005 to all authorized Dealers titled “Access to the CBN Discount Window” signed by Director, Financial Market Department, CBN, Dr. Alvan E. Ikoku is coming in view of the observed abuse of access to the CBN Standing Lending Facility by authorized dealers.
The CBN warned the authorized dealers to comply as any violation will result in their denial of access to its Standing Lending Facility.
“You are reminded that authorized dealers who come to any of the CBN’s windows are prohibited from interbank foreign exchange market on the same day” Ikoku stated.

Naira falls to N350 per dollar Naira traded at an all-time low of 350 to the dollar in a single interbank market trade of $100,000.
The currency was offered at N313 naira to the dollar and a total of $3.11 million had been traded Meanwhile, in another circular Ref: TED/FEM/FPC/GEN/01/006 titled “Re: Sales of Foreign Currency Proceeds of International Money Transfers to Bureaux De Change Operators” signed by the CBN’s Acting Director, Trade & Exchange Department, W.D. Gotring stated “ Authorised Dealers shall sell foreign exchange cash to BDCs subject to a maximum of $30,000.00 per week.
A BDC shall nominate its preferred Authorized Dealer (DMB) and can only procure the said amount from only that bank of its choice in a week. Any breach of this condition will attract appropriate sanction.” The circular further stated that “the selling rate by the Authorized Dealers to BDCs shall be the buying rate from International Money Transfers Operators, IMTSOs plus a margin not exceeding 1.5 per cent; Foreign exchange cash purchased by BDCs from Authorized Dealers (Ads) shall be sold to foreign exchange end-users at a rate not exceeding two per cent margin above the buying rate; For the avoidance of doubt, the two per cent margin stated shall be applicable to all funds to be retailed by BDCs regardless of source of fund; Authorized Dealers shall continue to render weekly returns on sales to BDCs and the BDCs shall also continue to render weekly returns on purchases from ADs as specified in the attached excel format to Trade & Exchange Department, CBN , Abuja.”
Other requirements in the circular include: “Funds purchased by BDCs shall be disbursed for the following eligible transactions only. In all cases, the maximum disbursement per transaction shall not exceed $5,000.00 for (a) Business Travel Allowance/ Personal Travel Allowance (b) Overseas School fees and (c) Overseas Medical fees.”
The CBN in the circular said “Record shall be maintained for all transactions by the BDCs showing the BVN of the end-user, including endorsement of the amount disbursed in the International Passport of the beneficiary; International Money Transfer Service Operators shall continue to render weekly returns on their operations with agent banks directly to the CBN as specified in the attached format.; All BDCS are required to render weekly returns on foreign exchange purchases from Authorized Dealers and other sources as well sales to the Director, Trade and Exchange Department as specified in the attached excel format.



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Benue Blog Portal: CBN Issues new limit for sale of foreign exchange cash to BDC
CBN Issues new limit for sale of foreign exchange cash to BDC
Benue Blog Portal
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