CBN Introduces New Forex Rules for BDCs to Curb Speculation and Enhance Transparency
The Central Bank of Nigeria (CBN) has rolled out fresh guidelines allowing Bureau de Change (BDC) operators to purchase up to $25,000 weekly from Authorised Dealer Banks (ADBs) to cater to retail forex demand.
The policy, aimed at improving transparency and curbing misuse, was detailed in a circular issued on February 5, 2025, and signed by Dr. W. J. Kanya, Acting Director of the Trade & Exchange Department.
Key Highlights of the New Guidelines
Single Dealer Rule to Prevent Speculation
To tighten oversight and limit speculation, BDCs are required to source their weekly forex allocation from only one authorised dealer bank. Any violation of this restriction will attract penalties from the CBN.
Uniform Exchange Rate and Profit Cap
Authorised dealers must sell forex to BDCs at the prevailing Nigerian Foreign Exchange Market (NFEM) rate, ensuring price consistency. Additionally, BDCs are permitted to charge a maximum of 1% above their purchase price when selling to end-users. This measure seeks to prevent excessive pricing and protect consumers.
Stricter Compliance and Reporting Standards
To enhance regulatory oversight, both ADBs and BDCs must comply with new reporting requirements:
- Authorised Dealer Banks must submit weekly reports on forex sales to BDCs using a prescribed format sent to the CBN’s Trade and Exchange Department.
- BDCs must provide daily reports on forex transactions via the Financial Institutions Forex Reporting System (FIFX).
These mandatory reports will help track forex movement and detect potential abuses in the system.
Transaction Limits and Anti-Fraud Measures
BDC operators can only disburse up to $5,000 per transaction per quarter for specific purposes, including:
- Business and Personal Travel Allowance (BTA/PTA)
- Overseas tuition payments
- Medical expenses abroad
To strengthen anti-money laundering efforts, the CBN mandates BDCs to collect Bank Verification Numbers (BVNs) from customers and endorse transaction details in their international passports. This ensures better tracking of forex usage and prevents financial crimes.
Enforcement and Penalties
The CBN has warned that any ADB or BDC failing to comply with these regulations—especially engaging in forex diversion—will face severe sanctions, including suspension of their operating license.
This policy shift aligns with the CBN’s ongoing efforts to stabilise the naira, increase forex availability, and maintain a transparent currency market.
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