The Central Bank of Nigeria (CBN) has issued new guidelines permitting Bureau de Change (BDC) operators to purchase up to $25,000 weekly from Authorised Dealer Banks (ADBs) to meet retail market demand for eligible invisible transactions.
The directive, contained in a circular from the Trade and Exchange Department, also outlines compliance requirements to ensure transparency and curb potential forex misuse.
Dated February 5, 2025, the circular was signed by Dr. W. J. Kanya, the Acting Director of the Trade & Exchange Department at the CBN.
BDCs limited to one dealer per week
Under the new regulations, BDCs must source the allotted forex from a single authorised dealer bank per week. This restriction is aimed at preventing speculative activity and ensuring better oversight. Any BDC found violating this rule will face appropriate sanctions from the CBN.
Also, authorised dealers must sell FX to BDCs at the prevailing rate in the Nigerian Foreign Exchange Market (NFEM) window to ensure consistency in pricing.
Forex sales to end-users capped at 1% margin
The CBN has imposed a 1% cap on the margin BDCs can charge end-users above their purchase price. This measure is designed to protect consumers from excessive charges and promote a fairer forex market.
Also, the one per cent margin applies to all forex sold by BDCs, irrespective of its source.
To enhance market transparency, the CBN has made reporting requirements mandatory for both Authorised Dealer Banks and BDCs:
These measures will help the CBN track forex flows and prevent illicit activities in the currency market.
Maximum $5,000 per disbursement
The circular also specifies that BDCs can only disburse purchased FX for specific transactions, with a maximum of $5,000 per transaction, quarterly. These include:
As part of efforts to combat financial crimes, the CBN has directed BDCs to maintain proper records of all transactions. This includes:
The CBN also reiterated that all operators must comply strictly with Anti-Money Laundering (AML) laws and Know Your Customer (KYC) requirements to prevent fraud and illicit financial activities.
The apex bank has warned that any Authorised Dealer Bank or BDC that violates these guidelines—including forex diversion—will face severe sanctions, including the suspension of their dealership license.
The apex bank has warned that any Authorised Dealer Bank or BDC that violates these guidelines—including forex diversion—will face severe sanctions, including the suspension of their dealership license.
The CBN’s move to allow BDCs access to forex purchases from authorised dealers is seen as part of broader efforts to improve liquidity in the forex market and ensure legitimate retail demand is met. The apex bank continues to implement measures to stabilise the naira and curb speculative activities.
What you should know