The Central Bank of Nigeria has imposed new foreign exchange restrictions on Bureau de Change operators, capping weekly purchases from authorised dealer banks at $25,000.
The directive, issued on Wednesday by the Trade and Exchange Department, aims to strengthen oversight of the parallel market and improve transparency in foreign exchange transactions.
The bank had, on December 19, 2024, granted BDC operators access to the Nigerian Foreign Exchange Market to purchase up to $25,000 weekly from authorised dealers, with the approval initially set to expire on January 30, 2025.
However, on Monday, it extended this approval until May.
Under the revised guidelines, each BDC is permitted to source foreign exchange from only one authorised dealer per week, with any breach of this condition attracting regulatory sanctions.
The CBN also mandated that foreign exchange acquired from banks must be sold to end-users at a margin not exceeding 1 per cent above the purchase rate.
“Authorised Dealers shall sell foreign exchange cash to BDCs subject to a maximum of USD25,000.00 (Twenty-five Thousand United States Dollars) to a BDC per week. A BDC shall approach its preferred Authorised Dealer Bank (ADB) and can only procure the said amount from only that bank of its choice in a week. Any breach of this condition will attract appropriate sanction.
“The selling rate by the Authorised Dealers to BDCs shall be the prevailing day rate at NFEM window; Foreign exchange cash purchased by BDCs from Authorised Dealer Banks shall be sold to foreign exchange end-users at a rate not exceeding one (1) percent margin above the buying rate,” it said.
In a bid to prevent illicit transactions, it said BDCs must record all sales, including beneficiaries’ Bank Verification Numbers (BVN), and ensure endorsements in international passports for disbursements linked to travel allowances.
Eligible transactions are restricted to personal and business travel allowances, overseas school fees, and medical expenses, with a maximum disbursement of $5,000 per transaction per quarter.
Authorised dealer banks and BDC operators are also required to adhere strictly to anti-money laundering regulations and Know Your Customer (KYC) protocols.
Authorised dealer banks must continue to submit weekly reports on foreign exchange sales to BDCs in the specified format to the Trade and Exchange Department of the CBN in Abuja via email.
Similarly, all BDCs are required to provide daily reports on their foreign exchange purchases from authorised dealers and other sources, as well as sales, through the Financial Institutions Forex Reporting System (FIFX).
The Central Bank of Nigeria has warned that any authorised dealer or BDC found diverting funds or breaching these guidelines will face sanctions, including the possible suspension of its dealership licence.
This latest move forms part of broader efforts to curb speculative activities in the forex market, stabilise the naira, and ensure compliance with official foreign exchange regulations.
