CBN raises FOREX supply to BDCs…offers $100m for forwards
In line with its pledge to sustain liquidity in the foreign exchange market, the Central Bank of Nigeria CBN) will from Monday, April 3, 2017 commence twice weekly FOREX sales to licensed Bureaux de Change (BDCs) in the country.
A statement by the Bank’s Acting Director, Corporate Communications Department, Isaac Okorafor, disclosed that weekly sale amount has been increased to $10, 000 (i.e. $5000 per bid).
The statement further disclosed that licensed BDCs are henceforth required to fund their accounts with the CBN on Mondays and Wednesdays while they receive their purchases on Tuesdays and Thursdays, respectively.
According to Okorafor, this strategic move is aimed at ensuring wider spread and liquidity in the market to Deposit Money Banks as well as BDCs.
Meanwhile, the CBN on Thursday, March 30, 2017, offered the total sum of $100 million to authorized dealers to service forwards request by wholesale customers in the interbank market.
It will be recalled that the CBN, in its resolve to sustain liquidity in the FOREX market, on Monday, March 27, 2017, offered $100m in wholesale forwards to DMBs, which was fully taken.
It would be recalled that the CBN released the sum of $85 million for sale to Deposit Money Banks (DMBs) at the rate of N 357/$1 for onward sale to retail end-users at not more than N360/$1, for invisibles such as Basic Travel Allowance(BTAs), medicals, school fees, etc.
The Bank also offered the sum of $100 million to authorized FOREX dealers in the interbank wholesale window to meet the requests of genuine wholesale customers.
The rates in the interbank window for wholesale transactions would still be determined by activities in the interbank market.
Banks had also been directed to immediately post the new N360/$1 rate on electronic display boards in the banking halls of their branches, adding that examiners from the CBN would visit banks to ensure the new rates are implemented.
The CBN spokesmen also reiterated the Bank’s directive to all banks to process and meet the demand for Travel Allowances (PTA/BTA) by end-users within 24 hours of such application, while applications for school fees and medical bills are to be met within 48 hours of such application.
Okorafor warned that the new move, aimed at further easing access of genuine end-users to forex, prohibited banks from selling foreign exchange funds meant for invisibles to Bureau De Change.
Going forward, he reiterated that all banks would receive amounts commensurate with their demand per week, which would be sold to customers who meet usual basic documentary requirements.
He therefore urged customers to report any erring bank to the CBN for investigation and appropriate sanction.