CBN OPENS FOREX MARKET TO BDC OPERATORS, CAPS WEEKLY FX PURCHASES AT $150,000
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The Central Bank of Nigeria (CBN) has approved the participation of licensed Bureau De Change (BDC) operators in the Nigerian Foreign Exchange Market (NFEM) in a move aimed at boosting foreign exchange liquidity in the retail segment and meeting the legitimate FX needs of end users.
Under the new policy, each licensed BDC is allowed to purchase up to $150,000 weekly, subject to compliance with existing operational guidelines.
The directive was conveyed in a circular signed by the Director of the Trade and Exchange Department, Musa Nakorji, which stated that all CBN-licensed BDCs may access foreign exchange through any Authorised Dealer Bank of their choice at prevailing market rates. The CBN said the decision is intended to deepen market efficiency and expand access to foreign exchange across the economy.
However, the apex bank stressed that the arrangement comes with strict compliance and risk-management requirements. Authorised Dealer Banks are mandated to carry out full Know-Your-Customer (KYC) and due diligence checks on BDC operators before selling foreign exchange to them.
To enhance transparency and accountability, the CBN directed all licensed BDCs to submit timely and accurate electronic returns in line with existing regulations. It also stipulated that any unutilised foreign exchange must be sold back to the market within 24 hours, as BDCs are prohibited from holding FX positions purchased from the NFEM.
The circular further outlined settlement restrictions, requiring that all FX transactions be conducted through settlement accounts with licensed financial institutions. Third-party transactions are prohibited, while cash settlement is limited to a maximum of 25 per cent of the transaction value.
The CBN noted that the policy aligns with its broader strategy to improve liquidity in the foreign exchange market while maintaining strong regulatory oversight to safeguard the integrity of Nigeria’s financial system.
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