The Central Bank of Nigeria (CBN) has approved the participation of licensed Bureau De Change (BDC) operators in the Nigerian Foreign Exchange Market (NFEM) as part of efforts to improve foreign exchange liquidity in the retail segment of the market and meet the legitimate needs of end users.
The apex bank also approved that weekly FX purchases by each BDC be capped at USD150,000, and that utilisation comply with existing BDC operational guidelines.
Under the new directive contained in a circular signed by the Director, Trade and Exchange Department, Musa Nakorji, all BDCs duly licensed by the CBN are permitted to access foreign exchange through any Authorised Dealer Bank of their choice, at the prevailing market rates. The move, according to the circular, aims to deepen market efficiency and ensure broader access to foreign exchange across the economy.
The CBN, however, imposed strict compliance and risk-management conditions on the transactions. Authorised dealers are required to conduct full Know-Your-Customer (KYC) and due diligence checks on BDC clients before any FX sale.
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To strengthen transparency and accountability, the CBN directed that all licensed BDCs must submit timely and accurate electronic returns in line with extant regulations. Any unutilised foreign exchange must be sold back to the market within 24 hours, as BDCs are prohibited from holding FX positions purchased from the NFEM.
The circular further restricts settlement practices, mandating that all FX transactions be conducted 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 amount.
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