The Central Bank of Nigeria has issued a circular instructing commercial banks to sell dollars to Pilgrims going to the Hajj at an exchange rate of N197.
The Central Bank explains that the sale of the forex will be funneled through commercial banks who are then mandated to sell to pilgrims at N197. Pilgrims are expected to purchase a minimum of $750 and a maximum of $1000 per pilgrim. The circular also reveals there are a total of 65,197 Pilgrims, thus the CBN will sell as much as $65,197,000 assuming every Pilgrim buys as much as $1000 each.
Nigeria’s official exchange rate closed at about N315 which suggest that this sale could cost Nigerian tax payers about N7, 693, 246,000 in exchange rate loss (based on 315 -197=118).
This is not the first time the Central Bank is selling dollars to Pilgrims at a subsidized rate. Last August it also sold dollars at N160 at a time when the official exchange rate was about N197. Read more on this here.