New directive targets improved retail forex access, tighter compliance, and stronger market transparency…….
The Central Bank of Nigeria (CBN) has authorised licensed Bureau De Change (BDC) operators to participate directly 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 policy, the apex bank approved a weekly foreign exchange purchase limit of 150,000 dollars for each licensed BDC, with utilisation required to comply strictly with existing operational guidelines governing the sector.
Details of the directive were contained in a circular signed by the Director of the CBN’s Trade and Exchange Department, Musa Nakorji. According to the circular, all BDCs duly licensed by the central bank are now permitted to access foreign exchange through any Authorised Dealer Bank of their choice at prevailing market rates. The measure is designed to enhance market efficiency and expand access to foreign exchange across the economy.
However, the CBN introduced stringent compliance and risk management conditions to guide the transactions. Authorised Dealer Banks are mandated to carry out full Know-Your-Customer and due diligence checks on BDC clients before executing any foreign exchange sales.
To promote transparency and accountability, the central bank directed all licensed BDC operators to submit timely and accurate electronic returns in line with existing regulations. The circular also requires that any unutilised foreign exchange be returned to the market within 24 hours, as BDCs are not permitted to hold foreign exchange positions purchased from the NFEM.
In addition, the directive tightens settlement rules, stipulating that all foreign exchange transactions must be conducted through settlement accounts maintained with licensed financial institutions. Third-party transactions are prohibited, while cash settlements are restricted to a maximum of 25 per cent of the value of each transaction.
The policy forms part of the CBN’s broader strategy to improve liquidity in the foreign exchange market while maintaining strong regulatory oversight and protecting the integrity of the financial system.
