By Ayomide Otitoju
The Central Bank of Nigeria (CBN) has authorised licensed Bureau De Change (BDC) operators to participate in the Nigerian Foreign Exchange Market (NFEM) to boost foreign exchange liquidity in the retail segment and meet legitimate end-user demand.
A circular signed by Musa Nakorji, Director of the Trade and Exchange Department, permits all CBN-licensed BDCs to access foreign exchange through any Authorised Dealer Bank at prevailing market rates, with weekly FX purchases capped at USD 150,000 per operator.
The CBN imposed strict compliance and risk-management requirements. Authorised dealers must conduct full Know-Your-Customer (KYC) and due diligence checks before selling FX to BDCs. Licensed BDCs are also required to submit accurate electronic returns and must sell any unutilised FX back to the market within 24 hours, as holding FX purchased from the NFEM is prohibited.
The circular limits settlement practices, mandating that all FX transactions go through settlement accounts with licensed financial institutions. Third-party transactions are prohibited, while cash settlement is capped at 25 per cent of each transaction.
The directive reflects the CBN’s strategy to improve retail market access, enhance liquidity, and maintain strong regulatory oversight to safeguard the integrity of the financial system.
