Poised to improve foreign exchange liquidity in the retail segment of the foreign exchange market, the Central Bank of Nigeria (CBN) on Tuesday said it has approved the participation of licensed Bureau De Change (BDC) operators in the Nigerian Foreign Exchange Market (NFEM).
According to the CBN, each BDC is allowed to purchase weekly FX of up to $50,000, to meet the legitimate needs of end users, while ensuring that utilisation complies with existing BDC operational guidelines.
The new directive contained in a circular signed by the Director, Trade and Exchange Department, Dr. 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.
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.
Overall, the directive, the statement aqdded, reflects the CBN’s broader strategy to balance market access with strong regulatory oversight, ensuring liquidity in the foreign exchange market while safeguarding financial system integrity.
