The Central Bank of Nigeria (CBN) has approved the participation of licensed Bureau De Change (BDC) operators in the Nigerian Foreign Exchange Market (NFEM) as part of efforts to improve foreign exchange liquidity in the retail segment and meet the legitimate needs of end users.
The approval was conveyed in a circular signed by the Director of the Trade and Exchange Department, Musa Nakorji. According to the directive, all BDCs duly licensed by the CBN are permitted to access foreign exchange through any Authorised Dealer Bank of their choice at prevailing market rates.
The apex bank, however, capped weekly foreign exchange purchases by each BDC at $150,000. It also directed that utilisation of the funds must strictly comply with existing BDC operational guidelines.
The CBN said the move is aimed at deepening market efficiency and ensuring broader access to foreign exchange across the economy, particularly within the retail segment.
To strengthen compliance and risk management, authorised dealer banks are required to conduct full Know-Your-Customer (KYC) and due diligence checks on BDC clients before executing any FX sale.
In addition, all licensed BDCs must submit timely and accurate electronic returns in line with existing regulations to promote transparency and accountability. The circular further stated that any unutilised foreign exchange must be sold back to the market within 24 hours, as BDCs are prohibited from holding FX positions purchased from the NFEM.
The directive also places restrictions on settlement practices. All FX transactions must be conducted through settlement accounts with licensed financial institutions. Third-party transactions are prohibited, while cash settlements are limited to a maximum of 25 per cent of each transaction amount.
Overall, the policy reflects the CBN’s broader strategy to balance improved market access with robust regulatory oversight, ensuring adequate liquidity in the foreign exchange market while safeguarding the integrity of Nigeria’s financial system.
