CBN caps weekly dollar purchases by BDCs at $150,000
The Central Bank of Nigeria (CBN) has approved a new foreign exchange policy that allows licensed Bureau De Change (BDC) operators to buy dollars from the Nigerian Foreign Exchange Market
- ...Opens access to FX market
The Central Bank of Nigeria (CBN) has approved a new foreign exchange policy that allows licensed Bureau De Change (BDC) operators to buy dollars from the Nigerian Foreign Exchange Market (NFEM), but with a weekly limit of 150,000 dollars for each operator.
In a circular signed by the Director of the Trade and Exchange Department, Dr. Musa Nakorji, the CBN said the decision is aimed at improving the supply of foreign exchange in the retail market and meeting the genuine needs of Nigerians who require foreign currency for personal and business purposes.
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Under the new directive, all BDCs that are properly licensed by the CBN can now buy foreign exchange from any Authorised Dealer Bank of their choice at the current market rate. This means BDC operators are no longer restricted to a narrow source of supply, as long as they follow the rules set by the regulator.
The apex bank explained that the policy is designed to make the foreign exchange market work better and allow more people and businesses to access foreign currency across the country. According to the circular, the move is expected to deepen market efficiency and support economic activities that depend on foreign exchange.
However, the CBN made it clear that the new access comes with strict rules to prevent abuse. Banks selling foreign exchange to BDCs are required to carry out full Know-Your-Customer and due diligence checks before completing any transaction. This is to ensure that only legitimate and licensed operators are allowed to participate in the market.
To improve transparency, the CBN directed all licensed BDCs to submit accurate and timely electronic returns in line with existing regulations. The circular also stated that any foreign exchange bought by a BDC but not used must be sold back into the market within 24 hours. BDCs are not allowed to hold or keep foreign exchange positions purchased from the NFEM.
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The CBN also placed limits on how transactions should be settled. All foreign exchange dealings must go through settlement accounts with licensed financial institutions. Third-party transactions are not allowed, while cash payments must not be more than 25 per cent of the total value of each transaction.
In a statement issued on Tuesday, the CBN said the new directive is part of a wider plan to improve the foreign exchange market while maintaining strict supervision. The bank said, “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.”
The CBN expressed confidence that the policy will help boost confidence in the foreign exchange market, reduce pressure in the retail segment, and support the smooth functioning of Nigeria’s financial system.
