In a strategic move to enhance the efficiency of Nigeria’s Foreign Exchange Market, the Central Bank of Nigeria (CBN) has introduced a set of operational changes targeting the Bureau De Change (BDC) segment. This announcement, disclosed on August 17, 2023, encompasses vital measures designed to streamline and elevate the operations of BDCs.
One of the notable changes within the new framework involves the adjustment of buying and selling spreads by BDC operators. The permissible range for these spreads is now set between -2.5% and +2.5% of the Nigerian Foreign Exchange market window’s weighted average rate from the preceding day. This initiative is expected to introduce a higher level of stability and transparency to the exchange rate dynamics, benefiting both BDC operators and the general public.
An equally significant alteration is the mandatory submission of periodic financial reports by BDC operators. These reports, including daily, weekly, monthly, quarterly, and yearly renditions, must be submitted via the upgraded Financial Institution Forex Rendition System (FIFX). This new system is tailored to meet the specific reporting requirements of each operator, bolstering oversight and accountability within the BDC sector.
The circular underscores the importance of timely and accurate returns submission, with non-compliance leading to sanctions and the potential withdrawal of operating licenses. This even applies to periods with zero transactions, reinforcing the culture of adherence and meticulous record-keeping.
The CBN calls upon all BDC operators and the public to familiarize themselves with these new guidelines and adhere to them diligently. By implementing these measures, the Central Bank envisions a more robust and well-regulated BDC segment, aligning with the broader objectives to enhance Nigeria’s foreign exchange market efficiency.
This strategic reform marks a notable shift in policy, signifying the re-entry of BDCs into Nigeria’s foreign exchange market. This change marks a departure from past policies that temporarily excluded BDC operators from market participation, representing a deliberate move by the CBN to reintegrate BDCs into the evolving foreign exchange landscape.