The Central Bank of Nigeria (CBN) has approved the return of licensed Bureau De Change (BDC) operators to the Nigerian Foreign Exchange Market (NFEM). This move is aimed at improving foreign exchange liquidity, especially in the retail segment of the market.
The approval was announced in a circular signed by the Director of the Trade and Exchange Department, Dr Musa Nakorji. According to the CBN, the decision is part of broader efforts to deepen market efficiency and make foreign exchange more accessible across the economy.
Weekly FX Purchase Cap Set at $150,000
Under the new directive, each licensed BDC is allowed to purchase a maximum of $150,000 per week from the FX market. All transactions must follow existing BDC operational guidelines, and purchases can be made through any authorized dealer bank at prevailing market rates.
This measure is designed to balance increased market access with proper regulation, ensuring that FX demand is met without encouraging speculation.
Stronger Compliance and Risk Controls Introduced
To protect the integrity of the financial system, the CBN has placed strict compliance requirements on both BDCs and authorized dealer banks. Banks are required to carry out full Know-Your-Customer (KYC) and due diligence checks before selling FX to any BDC.
In addition, all licensed BDCs must submit accurate and timely electronic returns in line with existing regulations to promote transparency and accountability.
Rules on FX Utilization and Settlement
The CBN has made it clear that BDCs are not allowed to hold foreign exchange positions. Any FX not utilized must be sold back into the market within 24 hours of purchase. All FX transactions must also be settled through designated accounts with licensed financial institutions.
Third-party transactions are strictly prohibited, while cash settlements are limited to a maximum of 25 per cent of each transaction value.
CBN’s Strategy to Strengthen the FX Market
Overall, this directive reflects the CBN’s ongoing strategy to improve liquidity in the Nigerian foreign exchange market while maintaining strong regulatory oversight. By allowing BDCs back into the NFEM under strict rules, the apex bank aims to enhance access to foreign exchange, reduce market distortions, and safeguard the stability of the financial system.
This development is expected to support smoother FX flows and improve confidence in Nigeria’s foreign exchange framework.
