The Central Bank of Nigeria (CBN) has approved the participation of licensed Bureau De Change (BDC) operators in the Nigerian Foreign Exchange Market (NFEM), a move aimed at boosting foreign exchange liquidity in the retail segment and meeting the legitimate needs of end users.
The approval, conveyed in a circular signed by the Director of the Trade and Exchange Department, Musa Nakorji, allows all duly licensed BDCs to access foreign exchange through any Authorised Dealer Bank of their choice at prevailing market rates.
According to the apex bank, the policy is designed to deepen market efficiency and expand access to foreign exchange across the economy. “This initiative is intended to improve liquidity in the retail FX market and ensure that legitimate demand is adequately met,” the circular stated.
However, the CBN placed a cap on weekly foreign exchange purchases by BDCs, limiting each operator to a maximum of 150,000 dollars. The bank also stressed that utilisation of the funds must strictly comply with existing BDC operational guidelines.
To strengthen oversight, the CBN imposed stringent compliance and risk-management conditions. Authorised Dealer Banks are required to conduct full Know-Your-Customer (KYC) and due diligence checks on BDCs before selling foreign exchange to them.
The circular further directed that all licensed BDCs must submit timely and accurate electronic returns in line with extant regulations. Any foreign exchange not utilised must be sold back to the market within 24 hours, as BDCs are prohibited from holding FX positions purchased from the NFEM.
In addition, settlement of all FX transactions must be carried out through designated settlement accounts with licensed financial institutions. Third-party transactions are expressly prohibited, while cash settlements are limited to a maximum of 25 per cent of the value of each transaction.
The CBN said the measures reflect its broader strategy to balance increased market access with strong regulatory oversight. “These guidelines are aimed at ensuring transparency, accountability and the integrity of the foreign exchange market, while supporting liquidity and financial system stability,” the apex bank noted.
