ASHENEWS reports that the Central Bank of Nigeria (CBN) says it has provided each of the Bureau de Change (BDC) operators with $10,000 at an exchange rate of N1,251 per US dollar.
According to a circular by the apex bank, each Bureau de Change is instructed to offer dollars to qualified customers at a rate that does not surpass 1.5% above the buying price.
By the circular, the development indicates that the Bureau de Change is advised not to sell above N1,269 for each $1.
“We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject wherein the CB approved a second tranche of sale of FX to eligible BDCs.
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“We write to inform you of the sale of $10,000 to each BDC at the rate of N1,251/$1. The BDCs are to sell to eligible end users at a spread of NOT MORE THAN 1.5 percent above the purchase price.”
A bureau de change is a business that, in competition with other similar businesses, makes its profit by buying foreign currency and then selling the same currency at a higher exchange rate. It may also charge a commission or fee on the purchase or sale.
In setting its exchange rates, the business would keep an eye on changing market conditions, as well as the rates quoted by competitors, and may be subject to government foreign exchange controls and other regulations.
The exchange rates charged at bureaux are generally related to the spot prices available for large interbank transactions and are adjusted to ensure a profit.
The rate at which a bureau will buy currency differs from that at which it will sell it; for every currency it trades, both will be on display, generally in the shop window. The bureau sells at a lower rate than that at which it buys.