The Central Bank of Nigeria (CBN) on Monday released new guidelines permitting Bureau de Change (BDC) operators to purchase up to $25,000 weekly from Authorised Dealer Banks (ADBs) to meet the demand in the retail market.
In a circular signed by Dr. W. J. Kanya, the Acting Director of the Trade & Exchange Department at the CBN, the bank also outlined compliance measures aimed at promoting transparency and preventing the misuse of foreign exchange (forex).
The new regulation mandates that BDCs source their allotted forex from a single authorised dealer bank each week.
This restriction is designed to avoid speculative activities and ensure better oversight.
“Any BDC found violating this rule will face appropriate sanctions from the CBN,” the apex bank warned.
In addition, authorised dealers are required to sell forex to BDCs at the prevailing rate in the Nigerian Foreign Exchange Market (NFEM) window to maintain consistency in pricing.
To further regulate the market, the CBN has introduced a 1% cap on the margin that BDCs can charge end-users above their purchase price, which applies to all forex sold, regardless of its source.
To boost market transparency, the CBN has enforced mandatory reporting requirements. “Authorised dealers must submit weekly reports of their forex sales to BDCs in a specified Excel format to the CBN Trade and Exchange Department via teddmo@cbn.gov.ng.
BDCs must render daily returns on forex purchases and sales (utilisation) through the Financial Institutions Forex Reporting System (FIFX),” the circular stated. These measures are intended to help the CBN monitor forex flows and prevent illicit activities in the currency market.
The guidelines further specify that BDCs are only permitted to disburse purchased forex for certain transactions, with a maximum of $5,000 per transaction per quarter.
These include Business Travel Allowance (BTA)/Personal Travel Allowance (PTA), overseas school fees, and overseas medical fees.
The CBN also made it clear that any Authorised Dealer Bank or BDC found violating these guidelines, including engaging in forex diversion, will face severe sanctions, which may include the suspension of their dealership license.
