The Central Bank of Nigeria (CBN) has approved weekly foreign exchange purchase in the region of $150,000 for each licensed Bureau De Change (BDC) operator, in order to boost liquidity in the retail end of the foreign exchange market.
The apex bank also cleared BDCs to participate in the Nigerian Foreign Exchange Market (NFEM) through authorised dealer banks, as part of efforts to meet the legitimate foreign exchange needs of end users and deepen market efficiency.
The directive was contained in a circular by the Director of the Trade and Exchange Department, Dr. Musa Nakorji, which stated that all duly licensed BDCs are permitted to source foreign exchange from any authorised dealer bank of their choice at prevailing market rates.
According to the circular, weekly FX purchases by each BDC must not exceed $150,000, while utilisation must strictly comply with existing operational guidelines governing BDC activities.
To ensure transparency and reduce risks, the CBN directed authorised dealer banks to carry out full Know-Your-Customer (KYC) and due diligence checks on BDC operators before selling foreign exchange to them.
The apex bank further mandated all licensed BDCs to submit timely and accurate electronic returns in line with extant regulations, warning that any unutilised foreign exchange must be returned to the market within 24 hours.
It also prohibited BDCs from holding FX positions sourced from the NFEM, insisting that all transactions must be settled through designated settlement accounts with licensed financial institutions.
Under the new framework, third-party transactions are banned, while cash settlement is restricted to a maximum of 25 per cent of each transaction.
The CBN said the measures are part of its broader strategy to improve foreign exchange liquidity, enhance market discipline and safeguard the integrity of the financial system.