The Central Bank of Nigeria (CBN) has announced new forex restrictions, limiting Bureau de Change (BDC) operators to purchasing a maximum of $25,000 per week from a single authorised dealer bank. The directive, issued in a circular signed by Dr. W. J. Kanya of the Trade and Exchange Department, aims to enhance transparency and regulate the retail foreign exchange market. Effective immediately, the policy prevents BDCs from sourcing forex from multiple banks, ensuring tighter control over forex distribution.
As part of the new guidelines, authorised dealers must sell forex to BDCs at the prevailing Nigerian Foreign Exchange Market (NFEM) rate. Additionally, the CBN has imposed a one per cent cap on the margin BDCs can charge end-users above their purchase rate. Any violation of these rules will result in appropriate sanctions. The restrictions apply to all forex transactions, regardless of the source, to prevent excessive pricing.
To enhance compliance, the CBN has mandated strict reporting requirements. Banks must submit weekly reports on forex sales to BDCs, while BDCs are required to provide daily updates on forex transactions through the Financial Institutions Forex Reporting System. These measures are designed to improve transparency and track forex movement within the system.
Furthermore, the CBN has limited the use of BDC-purchased forex to specific transactions, including business and personal travel allowances, overseas school fees, and overseas medical fees. End-users can receive a maximum of $5,000 per quarter. BDCs must also record all transactions, including Bank Verification Numbers (BVN) and passport endorsements, to strengthen anti-money laundering measures.
The policy is part of the CBN’s broader strategy to stabilise the naira, curb forex speculation, and improve liquidity in the forex market. The apex bank has warned that any bank or BDC found violating these guidelines will face severe penalties, including the suspension of their dealership licence. These measures reflect the CBN’s ongoing efforts to maintain stability in Nigeria’s financial system.
Source: Punch