BREAKING: CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

This move, detailed in a circular dated December 19, 2024, is designed to meet seasonal retail demand for FX during the holiday period. 

The circular was signed by T.G. Allu, on behalf of the Acting Director of the Trade and Exchange Department. 

The arrangement will be in effect from December 19, 2024, to January 30, 2025. 

Under the directive, BDCs may purchase FX from a single Authorized Dealer of their choice, provided they fully fund their accounts before accessing the market.  

The transactions will occur at the prevailing NFEM rate, and BDCs are required to adhere to a maximum 1% spread when pricing FX for retail end-users. All transactions conducted under this scheme must be reported to the CBN’s Trade and Exchange Department. 

The circular read: “In order to meet expected seasonal demand for foreign exchange, the CBN is allowing a temporary access for all existing BDCs to the NFEM for the purchase of FX from Authorised Dealers, subject to a weekly cap of USD 25,000.00 (Twenty-five thousand dollars only). This window will be open between December 19, 2024 to January 30, 2025. 

“BDC operators can purchase FX under this arrangement from only one Authorized Dealer of their choice and will be required to fully fund their account before accessing the market at the prevailing NFEM rate. All transactions with BDCs should be reported to the Trade and Exchange department, and a maximum spread of 1% is allowed on the pricing offered by BDCs to retail end-users.” 

The CBN assured the general public that PTA (Personal Travel Allowance) and BTA (Business Travel Allowance) remain available through banks for legitimate travel and business needs. These transactions are to be conducted at market-determined exchange rates within the NFEM framework. 

This initiative reflects the CBN’s strategy to stabilize the FX market and manage seasonal surges in demand. The bank reiterated its commitment to ensuring a fully functional and liquid foreign exchange market while addressing price volatility. 

The CBN last month revised its guidelines, permitting licensed Bureaux de Change (BDCs) to purchase foreign exchange directly from Authorized Dealers. 

Naijaonpoint earlier reported that local currency maintained its ground during the fourth trading session of the week, despite the US dollar index oscillating at a two-year high.  

The Nigerian apex bank’s reforms have played a pivotal role in promoting stability in Nigeria’s foreign exchange market.