In a move to strengthen the management of foreign exchange (FX) and curb illicit activities in Nigeria’s currency market, the Central Bank of Nigeria (CBN) has introduced new guidelines for Bureau de Change (BDC) operators and Authorised Dealer Banks (ADBs). Under the updated regulation, both BDCs and ADBs are now restricted to purchasing a maximum of $25,000 in foreign currency each week.
The CBN’s directive aims to ensure that these financial entities meet the needs of the retail market while also enhancing transparency and oversight in the FX market. WJ Kanya, the Acting Director of Trade and Exchange at the CBN, emphasized the importance of compliance with these guidelines to prevent misuse of foreign exchange and to safeguard against speculative activities.
As part of the new rules, BDCs are required to source foreign exchange from a single ADB per week. This measure is designed to streamline operations and reduce the risks associated with multiple sourcing channels. In addition, ADBs must submit weekly reports of their FX sales to BDCs, adhering to a specified format sent to the CBN’s Trade and Exchange Department. BDCs are also mandated to report their daily forex purchases and sales via the Financial Institutions Forex Reporting System (FIFX).
The CBN has also outlined clear limits on forex disbursement. BDCs are permitted to disburse a maximum of $5,000 for each quarterly transaction, which includes expenses such as Business Travel Allowance (BTA), Personal Travel Allowance (PTA), overseas school fees, and medical fees. This cap is aimed at preventing large-scale speculative purchases and ensuring that funds are directed toward legitimate personal and business needs.
These measures are part of the CBN’s broader efforts to improve the integrity of the currency market, track forex flows effectively, and prevent illegal activities such as money laundering and currency speculation.
The new guidelines are expected to create a more stable and transparent forex environment, benefiting both operators and the wider Nigerian economy.
