The Central Bank of Nigeria (CBN) has approved the participation of licensed Bureau De Change (BDCs) operators in the Nigerian Foreign Exchange Market (NFEM) as part of measures to boost foreign exchange liquidity in the retail segment and meet the legitimate needs of end users.
Gatekeepers News reports that under the new framework, the apex bank has capped weekly FX purchases by each BDC at $150,000, with utilisation required to comply strictly with existing BDC operational guidelines.
The directive is contained in a circular signed by the Director of the Trade and Exchange Department, Dr Musa Nakorji. It authorises all duly licensed BDCs to access foreign exchange through any Authorised Dealer Bank of their choice, at prevailing market rates.
According to the CBN, the move is aimed at deepening market efficiency and expanding access to foreign exchange across the economy.
However, the bank imposed strict compliance and risk-management conditions. Authorised dealer banks are required to conduct full Know-Your-Customer (KYC) and due diligence checks on BDC clients before any FX sale.
To enhance transparency and accountability, the CBN directed that all licensed BDCs must submit timely and accurate electronic returns in line with existing regulations. Any unutilised foreign exchange must be sold back into the market within 24 hours, as BDCs are prohibited from holding FX positions purchased from the NFEM.
The circular also tightens settlement rules, mandating that all FX transactions be carried out 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 each transaction value.
