Nigeria: CBN Approves Weekly $25,000 FX Purchases for BDCs to Address Yuletide Demand

The Central Bank of Nigeria (CBN) has granted Bureau de Change (BDC) operators temporary access to purchase up to $25,000 in foreign exchange weekly from the Nigerian Foreign Exchange Market (NFEM). This measure, aimed at addressing increased retail demand for foreign exchange during the festive season, will be in effect from December 19, 2024, to January 30, 2025.

In a circular dated December 19, 2024, signed by T.G. Allu on behalf of the acting Director of the Trade and Exchange Department, the CBN explained that transactions under this arrangement would occur at the prevailing NFEM rate.

Key Provisions of the Temporary Arrangement:

• Weekly Limit: Each BDC operator is permitted to purchase up to $25,000 per week.
• Single Dealer Rule: BDCs may transact with only one authorized dealer of their choice.
• Account Funding: Operators are required to fully fund their accounts before accessing the market.
• Pricing Spread: A maximum spread of 1% is allowed when BDCs price foreign exchange for retail end-users.
• Transaction Reporting: All transactions under this arrangement must be reported to the CBN’s Trade and Exchange Department.

The initiative is designed to ensure the availability of foreign exchange during the holiday season, supporting the CBN’s efforts to maintain stability in the FX market while addressing seasonal retail demand.