Naira Holds Steady as CBN Extends Dollar Access to Bureau De Change Operators

The naira remained stable across Nigeria’s foreign exchange (FX) markets on Tuesday, as reduced dollar demand and improved liquidity followed the Central Bank of Nigeria’s (CBN) decision to extend dollar access to Bureau De Change (BDC) operators. At the official Nigerian Foreign Exchange Market (NFEM), the naira closed at N1,499 per dollar, with market dealers quoting rates between N1,494 and N1,502. This marks a continued stabilization in the currency after recent volatility.

Data from the FMDQ Securities Exchange Limited indicated a minor 0.22% depreciation, as the naira closed at N1,498.95/$1 compared to Monday’s N1,495.60. In the parallel market, the local currency traded at an average of N1,600 per dollar, slightly above Monday’s N1,599.33. In some street trading zones, the dollar was sold at rates ranging between N1,595 and N1,605.

The CBN’s latest circular, signed by W. J. Kanya, acting director of the Trade and Exchange Department, announced the extension of temporary FX access for BDC operators. Initially set to expire on January 31, 2025, the directive now extends until May 30, 2025. The policy aims to enhance retail market liquidity and reduce speculative pressure on the naira.

BDC operators will continue to access the market under the same conditions outlined in the earlier directive from December 19, 2024. The terms allow each BDC to purchase a maximum of $25,000 weekly from authorized dealers, helping to meet retail demand for invisible transactions. This measure is part of broader CBN efforts to stabilize the naira and ensure steady FX supply.

The extension reflects CBN’s ongoing commitment to exchange rate stability amid Nigeria’s economic challenges. Analysts believe that sustained liquidity in the FX market, coupled with controlled demand, could further ease volatility in the coming months. Market participants will closely watch upcoming policy moves and global economic factors that may influence Nigeria’s currency outlook.

Source: BUSINESS DAY