The Central Bank of Nigeria (CBN) has introduced new regulations allowing Bureau de Change (BDC) operators to purchase up to $25,000 weekly from a single Authorised Dealer Bank (ADB) to meet retail forex demand. The directive, aimed at promoting transparency and curbing speculative activity, was outlined in a circular dated February 5, 2025, signed by Dr. W. J. Kanya, Acting Director of the Trade & Exchange Department.
Key Guidelines for BDCs
Single Dealer Restriction: Each BDC must source forex from only one dealer bank per week to prevent speculation and ensure better oversight.
Capped Sales Margin: BDCs can only charge a 1% margin above their purchase price when selling to end-users, ensuring fairness in pricing.
Mandatory Reporting:
- Authorised Dealer Banks must submit weekly forex sales reports to the CBN.
- BDCs must report daily forex transactions via the Financial Institutions Forex Reporting System (FIFX).
Transaction Limits & Compliance Measures
Maximum $5,000 Per Disbursement: BDCs can only allocate forex for specific transactions, including Business Travel Allowance (BTA), Personal Travel Allowance (PTA), overseas school fees, and medical expenses, with a cap of $5,000 per transaction per quarter.
Anti-Money Laundering Compliance: All transactions must adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. BDCs must collect the Bank Verification Number (BVN) of end-users and endorse the amount disbursed on their international passports.
Penalties for Non-Compliance
The CBN has warned that BDCs or dealer banks violating these guidelines will face strict penalties, including potential suspension of their operating licenses.
CBN’s Broader Forex Market Strategy
The new measures align with the CBN’s ongoing efforts to stabilize the forex market, reduce speculation, and enhance liquidity. The recent extension of the FX sale deadline to BDCs until May 30, 2025, further underscores the central bank’s commitment to regulating forex supply and ensuring market stability.
