Yuletide: CBN grants BDCs temporary access to $25,000 forex weekly on NFEM

• The Central Bank of Nigeria has granted Bureau de Change operators temporary access to$25,000 forex weekly on the Nigerian Foreign Exchange Market
• The permission is to meet the demand for forex during the yuletide season
• The move is part of CBN’s efforts to ensure forex stability and reduce market volatility

The Central Bank of Nigeria (CBN) has granted Bureau de Change operators (BDCs) temporary access to up to $25,000 weekly in foreign exchange (forex) from the Nigerian Foreign Exchange Market (NFEM).

The CBN stated this in a circular dated December 19, 2024, signed by T.G. Allu, on behalf of the acting Director, Trade and Exchange Department of the CBN.

It noted that the permission will be in effect from December 19, 2024, to January 30, 2025, and aims to meet the seasonal retail demand for forex during the holiday and Yuletide period.

The circular added that BDCs may purchase forex from a single authorised dealer of their choice, provided they fully fund their accounts before accessing the market.

According to the circular, all transactions will occur at the prevailing NFEM rate and BDCs are required to adhere to a maximum one per cent spread when pricing forex for retail end-users.

Also, all transactions conducted under the scheme are expected to be reported to the CBN’s Trade and Exchange Department.

The circular read, “To meet expected seasonal demand for foreign exchange, the CBN is allowing temporary access for all existing BDCs to the NFEM for the purchase of FX from authorised dealers, subject to a weekly cap of USD 25,000.00.

“This window will be open between December 19, 2024 and January 30, 2025.

“BDC operators can purchase FX under this arrangement from only one authorised dealer of their choice and will be required to fully fund their account before accessing the market at the prevailing NFEM rate.

“All transactions with BDCs should be reported to the Trade and Exchange department, and a maximum spread of one per cent is allowed on the pricing offered by BDCs to retail end-users.”

The apex bank further assured that Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) will remain available through banks for legitimate travel and business needs.

It said these transactions will be conducted at market-determined exchange rates within the NFEM framework.

CBN granted BDCs access to authorised dealers

To ensure forex stability and reduce market volatility, the CBN granted licenced BDCs access to purchase forex directly from authorised dealers to meet customers’ needs.

The revised guideline 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 guideline also stipulated total monthly transactions for BDCs subject to an aggregate cap as determined by the CBN.

It also noted that forex pricing will now be centralised through the Electronic Foreign Exchange Matching System (EFEMS), which was introduced on December 13.

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.