Licenced BDCs can buy FX directly from authorised dealers, says CBN

• The Central Bank of Nigeria says licenced Bureaux de Change can access forex directly from authorised dealers
• The revised guidelines of the CBN also set monthly aggregate cap
• The guidelines also stipulate a centralised pricing and monitoring system.

The Central Bank of Nigeria (CBN) says licensed Bureaux de Change (BDCs) can purchase foreign exchange (forex) directly from authorised dealers to meet customers’ needs.

The CBN stated this in revised guidelines, which announced the inclusion of licenced BDCs in the official forex market to streamline Nigeria’s forex market and enable the naira to reflect its true value.

The guidelines were contained in a circular by the CBN titled, ‘Revised Guidelines for the Nigeria Foreign Exchange Market (NFEM).’

The circular read, “Bureaux de Change (BDCs) operators licensed under the revised guidelines (ref FPRD/DIR/PUB/CIR/002/010 issued on May 22, 2024) are permitted to buy foreign exchange from Authorised Dealers to meet their customer needs, subject to the aggregate monthly cap stipulated by the CBN.

“All foreign exchange transactions consummated with Authorised Dealers, Bureaux de Change operators, and International Money Transfer Operators (IMTOs) are strictly subject to the terms of their respective licenses.

“All market participants are expected to adhere to the highest code of ethics and professional conduct in all their dealings in the foreign exchange market in line with the Nigerian FX Code.”

CBN sets a monthly aggregate cap

The revised guidelines stipulate that the total monthly transactions for BDCs are subject to an aggregate cap as determined by the CBN.

This is aimed at balancing market accessibility with the need for effective monitoring and control, as BDCs, previously excluded from certain forex market activities, will now become involved in meeting retail forex demand.

Including BDCs in the official forex window will hedge against forex pressures that create supply shortfalls, making it difficult for individual and small businesses reliant on BDCs to meet their forex needs.

According to the revised guidelines, all forex transactions involving BDCs must comply with the terms of their licenses and adhere to rigorous reporting standards.

It added that transactions will be monitored via real-time reporting systems, with BDCs required to submit daily reports to the CBN.

Centralised pricing and reporting systems

The revised guideline also means that forex pricing will now be centralised through the Electronic Foreign Exchange Matching System (EFEMS).

The apex bank will publish daily transactional rates, ensuring that market participants, including BDCs, have access to reliable data.

The guidelines also noted that Authorised Dealers, including commercial and merchant banks, must report forex transactions within 10 minutes via APIs, allowing for real-time monitoring, even as BDCs must adopt technology platforms for seamless reporting.

CBN extends BDCs’ recapitalisation deadline by 6 months over low compliance level

Meanwhile, TheRadar reported that the Central Bank of Nigeria (CBN) extended the deadline for the recapitalisation of Bureau De Change (BDC) operators by six months due to a low level of compliance.

The deadline to meet new capital requirements was extended from December 3, 2024, to June 3, 2025.