By Babajide Komolafe

The Central Bank of Nigeria (CBN) will this week increase official foreign exchange sale per bureaux de change by 100 per cent to $100,000. Vanguard investigation reveals that this was one of the outcomes of a meeting between the CBN and Association of Bureaux De change Operators of Nigeria (ABCON) last week.

The increase investigations reveal is limited to this week, and it is to ascertain how increase in dollar sales to BDCs would impact the parallel market exchange rate.

Earlier on Thursday, the CBN had increased to $500,000 from $250,000 the maximum amount of autonomous foreign exchange each bank could sell to BDCs.

The increased limit was communicated to authorised dealers and BDC operators via a circular signed by the Alhaji Musa Batari, Director, Trade and Exchange Department.

The circular stated, “In the continuing effort to sustain exchange rate stability in the Foreign Exchange Market, Authorized Dealers (ADs) are hereby informed that a maximum of USD500,000.00 (Five hundred thousand United States Dollars only) has been approve9 for each AD to sell ‘to Bureaux De Change Operators per week from autonomous funds.

Furthermore, each BDC is limited to purchase foreign exchange from only one Authorised Dealer per week.

Authorised Dealers and BDC operators are, therefore, enjoined to ensure compliance and render appropriate returns of the transactions, as any contravention shall be sanctioned appropriately.

This circular supersedes the earlier one on the subject dated June 24, 2011.

Meanwhile, ABCON has commended the CBN for increasing foreign exchange sales to bureaux de change (BDCs) both in the interbank and official market.

“The increases are very welcome as they would address the demand gap in the market and ABCON and the entire BDCs are grateful to the CBN for these increases”, said Dr. Emmanuel Balogun, President of the Association.

Two weeks ago, the Association had appealed to the apex bank to increase the amount of weekly official sale of foreign exchange to BDCs as well as raise the limit on banks’ sale of autonomous foreign exchange to BDCs.

“That the apex bank raised these limits due to our request shows the confidence the bank and indeed the economy repose in the BDC subsector”, he added

He called on BDCs to reciprocate this gesture by demonstrating understanding of the importance of their position in the foreign exchange market and hence ensure they comply with all regulatory requirements.

He said, “Though the disparity in exchange rates in recent times prompted by the limits had triggered panic and worry in the economy, ABCON had called on its members to stay within the two per cent regulatory margin in the sale of foreign exchange to end-users.

Now with the increase in the limits, the Association is reminding all BDCs to continue to stay within regulatory requirements.

“We also assure that we would continue to partner with the apex bank by supporting all policy measures aimed at achieving a stable exchange rate.

Most importantly, we assure that as a self regulatory organisation we would continue to monitor the BDCs sub-sector to ensure compliance with regulatory requirements”.