The Central Bank of Nigeria (CBN) has issued new guidelines limiting Bureau de Change (BDC) operators to purchasing a maximum of $25,000 per week from a single Authorised Dealer Bank (ADB) to meet retail market demand.

In a circular signed by Dr W. J. Kanya, Acting Director of the Trade & Exchange Department at the CBN, the apex bank outlined compliance measures aimed at ensuring transparency and curbing potential forex misuse.

Under the new regulations, BDCs must source their allocated forex from only one authorised dealer bank per week. This restriction is designed to prevent speculative activity and enhance regulatory oversight. The CBN warned that any BDC found violating this rule would face appropriate sanctions.

Additionally, authorised dealers must sell foreign exchange to BDCs at the prevailing rate in the Nigerian Foreign Exchange Market (NFEM) window to maintain price consistency.

The CBN has also imposed a 1% cap on the margin BDCs can charge end-users above their purchase price. This margin applies to all foreign exchange transactions, regardless of the source.

To enhance market transparency, the CBN has made reporting requirements mandatory for both Authorised Dealer Banks and BDCs. According to the circular, “Authorised dealers must submit weekly reports of their forex sales to BDCs in a specified Excel format to the CBN Trade and Exchange Department via teddmo@cbn.gov.ng. Similarly, BDCs must render daily returns on forex purchases and sales through the Financial Institutions Forex Reporting System (FIFX). These measures will enable the CBN to track forex flows and prevent illicit activities in the currency market.”

The circular further specifies that BDCs can only disburse purchased foreign exchange for specific transactions, with a maximum of $5,000 per transaction per quarter. These transactions include Business Travel Allowance (BTA), Personal Travel Allowance (PTA), overseas school fees, and overseas medical fees.

The CBN reiterated that any Authorised Dealer Bank or BDC found violating these guidelines, including forex diversion, would face severe sanctions, including the suspension of their dealership licence.