New CBN guidelines allow BDC to buy forex directly from Authorized Dealers

This is part of the central bank’s move aimed at streamlining Nigeria’s foreign exchange (FX) market enabling the naira to reflect its true value.

This decision, outlined in the CBN circular titled “Revised Guidelines for the Nigeria Foreign Exchange Market (NFEM)” issued on November 29, 2024, marks a pivotal shift in the regulatory landscape for BDCs.

The revised guidelines cover a wide range of regulatory and operational aspects, touching on the roles of Authorized Dealers, Bureaux de Change (BDCs), pricing mechanisms, interbank trading, compliance, and reporting standards.

One of the most significant changes in the revised guidelines is the inclusion of licensed Bureaux de Change (BDCs) in the official FX market.

For the first time in years, BDCs are now allowed to buy FX directly from Authorized Dealers, subject to a monthly cap set by the CBN.

Expanding BDCs’ operational scope – Under the new guidelines, licensed BDC operators can buy FX from Authorized Dealers to meet customer needs.

The revised guidelines also mandate that all FX transactions involving BDCs must comply with the terms of their licenses and adhere to rigorous reporting standards.

Transactions will be monitored via real-time reporting systems, with BDCs required to submit daily reports to the CBN.

Under the revised framework, FX pricing will now be centralized through the Electronic Foreign Exchange Matching System (EFEMS).

The new CBN guidelines are focused on making FX transactions more transparent and easy to track. BDC operators are now required to send daily reports of all their transactions to the CBN.

By following the guidelines and using the right technology, BDCs should be able to build trust with customers and work better within the official FX market.