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Forex: CBN approves wider margin for BDCs

•Apex bank boosts liquidity with $210m

The Central Bank of Nigeria has approved an upward review of the trading margin available to operators of Bureau De Change in the country.

The Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, confirmed this in a statement issued on Monday.

He said that following the approval by the apex bank, the BDC operators were now to buy dollars from the apex bank at the rate of N357 and sell at N360.

This, he noted, would leave them with a positive margin of N3 per dollar sold.

Okorafor explained that the decision was aimed at giving the BDCs a level playing field to enable them compete favourably with other authorised dealers in the foreign exchange market.

The statement urged the BDC operators to abide by the new guidelines and not exploit desperate customers by selling the dollar above the N360 band.

It also warned that the BDCs would be sanctioned if any case of infraction was established against them.

The CBN had in March last year released a foreign exchange policy, under which it directed licensed BDCs in the country to purchase forex from it at the rate of N360 to a dollar, while selling same to customers at no more than N362/$1.

At the time of the directive, the aim of the apex bank was to achieve convergence between the rates in the inter-bank window and that of the BDCs.

With the rates in both windows now virtually converged, the objective of the CBN is to ensure a level playing field and sustain the level of liquidity in the forex market, the apex bank noted.

Meanwhile, the CBN on Monday offered the sum of $210m for sale to meet the requests of customers.

A breakdown of the amount showed that $100m was made available to dealers in the wholesale segment of the market, while the Small and Medium Enterprises window as well as those in the invisibles segment got $55m to each.