The Central Bank of Nigeria (CBN) has issued new guidelines permitting Bureau de Change (BDC) operators to purchase up to $25,000 weekly from Authorised Dealer Banks (ADBs) to meet retail market demand for eligible invisible transactions.
The directive, contained in a circular from the Trade and Exchange Department, also outlines compliance requirements to ensure transparency and curb potential forex misuse.
Dated February 5, 2025, the circular was signed by Dr. W. J. Kanya, the Acting Director of the Trade & Exchange Department at the CBN.
BDCs limited to one dealer per week
Under the new regulations, BDCs must source the allotted forex from a single authorised dealer bank per week. This restriction is aimed at preventing speculative activity and ensuring better oversight. Any BDC found violating this rule will face appropriate sanctions from the CBN.
Also, authorised dealers must sell FX to BDCs at the prevailing rate in the Nigerian Foreign Exchange Market (NFEM) window to ensure consistency in pricing.
Forex sales to end-users capped at 1% margin
The CBN has imposed a 1% cap on the margin BDCs can charge end-users above their purchase price. This measure is designed to protect consumers from excessive charges and promote a fairer forex market.
Also, the one per cent margin applies to all forex sold by BDCs, irrespective of its source.
Mandatory reporting for dealers and BDCs
To enhance market transparency, the CBN has made reporting requirements mandatory for both Authorised Dealer Banks and BDCs:
- Authorised dealers must submit weekly reports of their forex sales to BDCs in a specified Excel format to the CBN Trade and Exchange Department via [email protected].
- BDCs must render daily returns on forex purchases and sales (utilisation) through the Financial Institutions Forex Reporting System (FIFX).
These measures will help the CBN track forex flows and prevent illicit activities in the currency market.
Maximum $5,000 per disbursement
The circular also specifies that BDCs can only disburse purchased FX for specific transactions, with a maximum of $5,000 per transaction, quarterly. These include:
- Business Travel Allowance (BTA) / Personal Travel Allowance (PTA)
- Overseas school fees
- Overseas medical fees
Strengthened anti-money laundering measures
As part of efforts to combat financial crimes, the CBN has directed BDCs to maintain proper records of all transactions. This includes:
- Bank Verification Number (BVN) of end-users
- Endorsement of the amount disbursed in the beneficiary’s international passport
The CBN also reiterated that all operators must comply strictly with Anti-Money Laundering (AML) laws and Know Your Customer (KYC) requirements to prevent fraud and illicit financial activities.
Sanctions for non-compliance
The apex bank has warned that any Authorised Dealer Bank or BDC that violates these guidelines—including forex diversion—will face severe sanctions, including the suspension of their dealership license.
The CBN’s move to allow BDCs access to forex purchases from authorised dealers is seen as part of broader efforts to improve liquidity in the forex market and ensure legitimate retail demand is met. The apex bank continues to implement measures to stabilise the naira and curb speculative activities.
What you should know
- Nairametrics earlier reported that the CBN extended the deadline for Bureau de Change (BDC) operators to access the Nigerian Foreign Exchange Market (NFEM) for weekly FX purchases.
- In a circular signed by Dr. W.J. Kanya, the Acting Director of the Trade & Exchange Department at the CBN on Monday, the apex bank announced that the previous deadline of January 31, 2025, has now been extended to May 30, 2025.
- The extension is expected to provide BDC operators with continued access to FX, potentially stabilizing the parallel market and improving liquidity. It also signals the CBN’s sustained intervention in managing forex supply while keeping its regulatory oversight intact.
