The Central Bank of Nigeria (CBN) is taking steps to modernize Bureau de Change (BDC) operations and enhance transparency while clamping down on illicit practices in the foreign exchange market. This announcement was made by the CBN Deputy Governor, Folashodun Shonubi, during a recent address.
Shonubi emphasized the need for BDC operators to embrace technology and adhere to electronic transactions or risk losing their licenses. The CBN intends to enforce electronic operations as part of its efforts to reduce cash-driven interactions within the BDC market.
The CBN Deputy Governor accused certain BDCs of engaging in round-tripping activities, which contradicts their primary role of facilitating small-value forex transactions. Round-tripping involves acquiring foreign currency through official channels but then diverting it to the black market for profit.
He stated, “The BDC, instead of playing its primary role, takes the foreign currency they receive to the black market. We will soon close down any BDC that does not operate electronically. The forex market is supposed to be seamless and transparently carried out.”
The move to modernize BDC operations aligns with the CBN’s broader efforts to enhance transparency and efficiency in Nigeria’s foreign exchange market. By promoting electronic transactions and reducing cash reliance, the CBN aims to create a more seamless and accountable forex market.
The announcement has raised expectations within the industry for a more streamlined and compliant BDC sector that aligns with the CBN’s vision for the Nigerian forex market’s future.