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From Adanna Nnamani, Abuja
The Central Bank of Nigeria (CBN) has introduced new guidelines that permit Bureau de Change (BDC) operators to purchase up to $25,000 weekly from Authorised Dealer Banks (ADBs) to meet the growing demand for eligible retail market transactions.
This move, outlined in a circular issued on February 5, 2025, aims to streamline the forex market, enhance transparency, and combat potential misuse of foreign exchange resources.
The circular, signed by Dr. W. J. Kanya, Acting Director of the Trade & Exchange Department, underscores the importance of compliance to ensure a stable and transparent forex market. The CBN mandates that BDCs must source their allotted foreign exchange from a single authorised dealer per week, helping to curb speculative activity and enforce better oversight. Any violation of this rule will result in strict sanctions, reinforcing the need for discipline in the forex market.
Additionally, the new guidelines require that all foreign exchange sales to BDCs be conducted at the prevailing rate in the Nigerian Foreign Exchange Market (NFEM) window. This regulation ensures consistent pricing across the market, providing a fairer environment for both BDCs and consumers.
To protect end-users from excessive charges, the CBN has capped the margin that BDCs can charge at 1% above the purchase price. This applies to all forex transactions, regardless of the source, helping to promote fairness and transparency in the forex exchange process.
As part of the efforts to enhance market transparency, the CBN has also mandated that both ADBs and BDCs comply with robust reporting requirements.
ADBs are now required to submit weekly reports of their forex sales to BDCs, while BDCs must submit daily returns on forex purchases and sales through the Financial Institutions Forex Reporting System (FIFX). This will enable the CBN to track forex flows and prevent illicit activities in the currency market.
Furthermore, BDCs are limited to disbursing a maximum of $5,000 per transaction for specific eligible expenses, including Business Travel Allowance (BTA), Personal Travel Allowance (PTA), overseas school fees, and medical expenses.
In a bid to strengthen anti-money laundering efforts, the CBN has outlined stringent measures for BDCs to maintain records, including the Bank Verification Number (BVN) of end-users and endorsements on the amount disbursed in the beneficiary’s international passport. The CBN emphasized that all operators must adhere strictly to Anti-Money Laundering (AML) laws and Know Your Customer (KYC) requirements to prevent fraud and other illicit financial activities.
The apex bank has also warned that any BDC or Authorised Dealer Bank found violating these guidelines will face severe sanctions, including the suspension of their operating license. This stern approach is part of the CBN’s broader strategy to enhance liquidity in the forex market, stabilize the naira, and eliminate speculative activities that could undermine the economy.
