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 needs of end users.
Under the new framework, the apex bank has placed a weekly cap of $150,000 on foreign exchange purchases by each BDC, stressing that all transactions must comply strictly with existing operational guidelines.
The directive was contained in a circular signed by the Director of the Trade and Exchange Department, Dr. Musa Nakorji, which stated that all CBN-licensed BDCs are now permitted to access foreign exchange through any Authorised Dealer Bank of their choice, at prevailing market rates.
According to the CBN, the policy is designed to deepen market efficiency, broaden access to foreign exchange, and improve liquidity distribution across the economy.
However, the CBN also introduced strict compliance and risk management requirements. Authorised dealer banks have been mandated to carry out comprehensive Know-Your-Customer (KYC) procedures and due diligence checks on all BDC clients before FX sales can be processed.
To enhance transparency, the apex bank directed licensed BDCs to submit timely and accurate electronic returns in line with extant regulations. It further stipulated that any foreign exchange purchased but not utilised must be sold back into the market within 24 hours, noting that BDCs are prohibited from holding FX positions sourced from the NFEM.
The circular also introduced settlement restrictions, requiring that all FX transactions be conducted strictly through designated settlement accounts with licensed financial institutions. The CBN barred third-party transactions and limited cash settlements to a maximum of 25 per cent of each transaction amount.
The latest directive, analysts say, reflects the CBN’s broader effort to strike a balance between widening access to foreign exchange and maintaining strong regulatory oversight, while safeguarding the integrity of the financial system.
