The Central Bank of Nigeria (CBN) has announced recalibrated guidelines for licensed Bureau De Change (BDC) operators, signaling a new phase in the nation’s foreign exchange (FX) market. Under the updated framework, BDCs can access up to $150,000 weekly through authorised dealer banks, strictly at prevailing market rates. The move aims to balance liquidity support with tighter compliance measures, ensuring FX flows remain traceable and regulated.
According to a circular signed by Dr. Musa Nakorji, Director of the Trade and Exchange Department, BDCs may source FX from any authorised dealer bank of their choice, provided they adhere to existing operational guidelines. The circular emphasizes full Know-Your-Customer (KYC) compliance, timely electronic reporting, and the mandatory return of any unutilised foreign exchange within 24 hours. Third-party transactions are prohibited, and cash settlements are capped at 25 percent of each deal, promoting electronic transactions and formal banking intermediation.
Nigeria’s retail FX demand has surged in recent months due to travel, education, medical needs, and small-scale trade. The CBN describes the adjustment as a “calibrated liquidity intervention” rather than a policy concession. By allowing BDCs controlled access to FX at market rates, authorities hope to deepen retail market liquidity, encourage price convergence across segments, and reinforce the role of regulated financial institutions in facilitating FX transactions.
While the weekly access limit has increased, key compliance requirements remain unchanged. FX must be sold strictly at prevailing market rates, and all transactions require proper documentation. BDCs are barred from holding FX positions, and any unutilised funds must be returned promptly. The 25 percent cash settlement ceiling encourages electronic payments, making FX flows more auditable and reducing opacity traditionally associated with the retail FX segment.
CBN regulators stress that this is not a rollback but a fine-tuning of existing BDC rules within a market-based FX regime. By channeling FX through formal banking systems and maintaining strict oversight, the central bank aims to stabilize the market while keeping transparency and discipline central. Observers note that this approach could gradually narrow spreads between official and parallel markets, enhance traceability, and support the broader goal of exchange rate stability in Nigeria.
source: The Sun