Oyinpereye Forcados
In a renewed effort to stabilise the foreign exchange market and curb speculative trading, the Central Bank of Nigeria (CBN) has introduced new guidelines for the sale of forex to Bureau de Change (BDC) operators. The directive, issued by the CBN’s Trade and Exchange Department, aims to improve market transparency, regulate pricing, and prevent hoarding.
The circular, signed by Dr. W. J. Kanya, Acting Director of the Trade & Exchange Department, permits BDCs to purchase up to $25,000 per week from authorised dealer banks (ADBs). However, to ensure better oversight, each BDC is restricted to dealing with only one dealer bank per week.
New Measures to Ensure Transparency
To prevent excessive pricing and speculation, the CBN has capped the profit margin for BDCs at 1% above the purchase rate. This ensures that forex remains accessible to genuine users at fair prices.
Additionally, the new rules require both BDCs and dealer banks to comply with strict reporting obligations. Dealer banks must submit weekly forex sales reports to the CBN, while BDCs are mandated to file daily transaction returns via the Financial Institutions Forex Reporting System (FIFX).
Approved Use of Forex and Transaction Limits
The CBN has also imposed restrictions on how BDCs can utilise forex, limiting sales strictly to:
Personal and Business Travel Allowance (PTA/BTA)
Overseas school fee payments
Medical expenses abroad
Furthermore, no single disbursement can exceed $5,000 per transaction, ensuring that forex allocation is directed towards genuine economic needs rather than speculation.
Stronger Anti-Money Laundering Compliance
In a bid to combat financial crimes, the CBN has reinforced Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. BDCs must verify the Bank Verification Number (BVN) of every end-user and ensure that transactions are documented in the recipient’s international passport as proof of fund usage.
The apex bank has also issued a stern warning that any violations—including forex diversion or failure to submit transaction reports—will attract severe penalties, including license suspension.
Will the New Rules Ease Forex Pressure?
The reintroduction of forex sales to BDCs signals the CBN’s commitment to increasing liquidity in the retail forex market. However, financial analysts warn that the policy’s success will depend on broader economic reforms, increased forex inflows, and improved investor confidence.
While the CBN’s measures may provide short-term relief, sustained stability in the forex market will ultimately require a combination of strong monetary policies, reduced reliance on imports, and increased local production.
For now, the focus is on how effectively BDCs and dealer banks will implement these new regulations in the coming weeks.