T he Central Bank of Nigeria (CBN) has introduced new guidelines that limit Bureau de Change (BDC) operators to purchasing a maximum of $25,000 per week from a single authorised dealer bank. This move is part of the CBN's efforts to regulate the retail foreign exchange market and promote greater transparency.
The directive, issued in a circular on Wednesday from the Trade and Exchange Department, is effective immediately. It mandates that BDCs must source their foreign exchange allocation from only one authorised dealer bank per week, thus preventing them from obtaining funds from multiple banks.
The new rules, which apply to all forex sold by BDCs, include several key provisions:
- BDCs are restricted to purchasing no more than $25,000 from a single authorised dealer bank weekly.
- The selling rate by authorised dealers to BDCs must be based on the prevailing rate in the Nigerian Foreign Exchange Market (NFEM).
- A one per cent cap is imposed on the margin BDCs can charge end-users above the purchase rate, aiming to curb excessive pricing.
In addition to these provisions, BDCs and authorised dealers are now required to adhere to stringent reporting standards. Banks must submit weekly reports on forex sales to BDCs, while BDCs are required to file daily reports on forex purchases and sales through the Financial Institutions Forex Reporting System.
Further, the CBN has imposed limits on the use of BDC-purchased forex, with a quarterly disbursement cap of $5,000 per end-user. Eligible transactions include business and personal travel allowances, overseas school fees, and overseas medical fees.
To bolster anti-money laundering efforts, BDCs must maintain thorough records of all transactions, including the Bank Verification Number (BVN) of end-users and the endorsement of the amount disbursed in the beneficiary's international passport.
The CBN warned that any BDC or authorised dealer found in violation of the guidelines would face severe sanctions, including the suspension of their dealership licence. This move is part of the CBN's broader strategy to stabilise the naira, prevent forex speculation, and improve liquidity in the foreign exchange market.
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