The Central Bank of Nigeria (CBN) has approved the participation of licensed Bureau De Change (BDC) operators in the Nigerian Foreign Exchange Market (NFEM) to enhance liquidity in the retail segment and meet the legitimate foreign exchange needs of end users.
Under the new directive, the CBN capped weekly foreign exchange purchases for each BDC at $150,000. The apex bank stated that utilisation of the funds must strictly comply with existing BDC operational guidelines.
The approval was conveyed in a circular signed by the Director of the Trade and Exchange Department, Dr. Musa Nakorji. According to the circular, all duly licensed BDCs may access foreign exchange through any Authorised Dealer Bank of their choice at prevailing market rates.
The measure is aimed at deepening market efficiency and broadening access to FX across the economy. However, the CBN imposed stringent compliance and risk-management requirements.
Authorised Dealer Banks must conduct comprehensive Know-Your-Customer (KYC) and due diligence checks on BDCs before processing FX sales. In addition, all licensed BDCs are required to submit timely and accurate electronic returns in line with extant regulations to strengthen transparency and regulatory oversight.
The circular further stipulates that any unutilised foreign exchange must be resold into the market within 24 hours. BDCs are prohibited from holding FX positions acquired through the NFEM.
Settlement procedures have also been tightened. All transactions must be processed through settlement accounts maintained with licensed financial institutions. Third-party transactions are disallowed, while cash settlements are restricted to a maximum of 25 percent of the total transaction value.
The directive underscores the CBN’s ongoing efforts to stabilise the foreign exchange market and improve regulatory discipline within the retail FX segment.
