The Central Bank of Nigeria has resumed selling US dollars to money changers to counter the falling value of the naira. The move comes after the naira-dollar exchange rate fell to a low of NGN1.639 per dollar, likely due to increased demand for US dollars for travel and business. The central bank has outlined rules for money changers to participate in the scheme, including a one percent markup on the purchase price and designated locations for applications.
Nigeria's Persistent Foreign Exchange Shortage
On September 6, the Central Bank of Nigeria (CBN) resumed the sale of US dollars to Bureau de Change (BDC) operators to meet retail demand for eligible non-cash transactions. The bank said eligible BDCs will be provided with $20,000 at an exchange rate of NGN1,580 to the dollar.
The latest intervention by Nigeria's central bank comes after the naira-dollar exchange rate fell to NGN1.639, according to a report. Nigerian observers have attributed the currency's decline to increased demand for US dollars from wealthy residents traveling for vacation and business.
As Bitcoin.com News previously reported, the CBN took a similar step in July after the naira hit an all-time low. However, at that time, the CBN sold US dollars to BDCs at NGN1,450 while authorized dealer banks were offered over $100 million at prices ranging from NGN1,498 to NGN1,530. Prior to that, the CBN had injected over $80 million in May.
Meanwhile, in a statement, the CBN outlined the rules that BDCs applying for this service must comply with.
“All BDCs are permitted to be sold to eligible end users at a margin of not more than 1% over the CBN buying rate. BDCs interested in this transaction are directed to make payment in naira to the CBN Deposit Account Number,” the CBN stated.
The central bank also directed interested BDCs to submit their applications at the bank’s branches in Abuja, Aba, Kano and Lagos.
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