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 CBN has also approved that weekly forex purchases by each BDC be capped at $150,000, and that utilisation comply with existing BDC operational guidelines.
The new directive by the apex bank is contained in a circular signed by the Director, Trade and Exchange Department, Musa Nakorji.
The circular stated that 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.
However, the CBN has imposed strict compliance and risk-management conditions on the transactions.
It said authorised forex dealers are required to conduct full Know-Your-Customer (KYC) and due diligence checks on BDC clients before any forex sale.
To strengthen transparency and accountability, the CBN further directed that all licensed BDCs must submit timely and accurate electronic returns in line with extant regulations.
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“Any unutilised foreign exchange must be sold back to the market within 24 hours, as BDCs are prohibited from holding forex positions purchased from the NFEM,” the CBN said.
Also, the circular restricted settlement practices, mandating that all foreign exchange transactions be conducted through settlement accounts with licensed financial institutions.
The apex bank therefore, prohibited third-party transactions, while cash settlement is limited to a maximum of 25 percent of each transaction amount.
Overall, the directive 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.
