Bureau de Change (BDC) operators have been temporarily authorised by the Central Bank of Nigeria (CBN) to buy up to $25,000 worth of foreign exchange (FX) every week from the Nigerian Foreign Exchange Market (NFEM).
The purpose of this action, which is described in a circular dated December 19, 2024, is to satisfy the seasonal retail demand for foreign exchange during the holiday season.
T.G. Allu signed the circular on behalf of the Acting Director of the Trade and Exchange Department.
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The deal will take effect on December 19, 2024, and run until January 30, 2025.
As long as they fully balance their accounts before accessing the market, BDCs are permitted to buy foreign exchange from a single Authorised Dealer of their choice under the regulation.
Transactions to take place at the current foreign exchange rate
When pricing FX for retail end users, BDCs must maintain a maximum one percent spread, and the transactions will take place at the current NFEM rate. The CBN’s Trade and Exchange Department must be notified of every transaction carried out under this program.
Excerpt from the circular read:
“In order to meet expected seasonal demand for foreign exchange, the CBN is allowing a 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 (Twenty-five thousand dollars only).”
“This window will be open between December 19, 2024 to January 30, 2025.”
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“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 percent is allowed on the pricing offered by BDCs to retail end-users.”
The CBN assured the public that banks will continue to offer PTA (Personal Travel Allowance) and BTA (Business Travel Allowance) for valid travel and business purposes.
According to the NFEM framework, these transactions must be carried out at “market-determined exchange rates.”
The CBN’s effort to control seasonal spikes in demand and stabilise the foreign exchange market is reflected in this program.