CBN authorizes BDCs to resume Forex market

The Central Bank of Nigeria (CBN) has approved the resumption of foreign exchange sales to licensed Bureau De Change (BDC) operators in the Nigerian Foreign Exchange Market (NFEM), in a bid to boost liquidity and improve retail access to forex.

The approval was announced in a circular signed by the Director of the Trade and Exchange Department, Dr. Musa Nakorji. According to the circular, each licensed BDC is permitted to purchase up to $150,000 weekly, subject to compliance with existing operational guidelines. Under the new framework, BDCs are allowed to source foreign exchange from authorised dealer banks at prevailing market rates.

The CBN said the move is aimed at enhancing market efficiency and expanding access to foreign exchange across the economy.

However, the apex bank introduced strict compliance and risk management measures. Authorised dealer banks have been directed to conduct thorough Know-Your-Customer (KYC) and due diligence checks before processing FX transactions for BDCs.

To ensure transparency and accountability, all licensed BDCs are required to submit accurate and timely electronic returns in line with regulatory requirements.

The CBN also stipulated that any foreign exchange purchased but not utilised must be resold into the market within 24 hours, as BDCs are prohibited from holding FX positions sourced from the NFEM.

Additionally, the apex bank placed limits on settlement procedures. All transactions must be executed through settlement accounts with licensed financial institutions. Third-party transactions are prohibited, while cash settlements are capped at 25 per cent of each transaction.

The CBN said the measures form part of its broader strategy to improve market access while maintaining strong regulatory oversight and safeguarding the stability of the financial system.