The Central Bank of Nigeria (CBN) has rolled out new regulations affecting Bureau de Change (BDC) operators, aiming to reinforce oversight and improve transparency in the foreign exchange market. Under the revised guidelines, BDCs are now limited to weekly foreign exchange purchases of $25,000 from only one authorized dealer bank.......CONTINUE READING THE ARTICLE FROM THE SOURCE>>>>>
This directive, issued by the Trade and Exchange Department on February 6, 2025, builds upon an earlier approval that allowed BDCs access to the Nigerian Foreign Exchange Market (NFEM) for the same amount. Initially set to expire on January 30, the approval has now been extended until May, reflecting the CBN’s commitment to regulating the parallel market effectively.
Key aspects of the new guidelines require BDCs to source foreign exchange from a single authorized dealer each week, with strict penalties for any breaches. Additionally, foreign exchange bought from banks must be sold to end-users with a margin not exceeding 1% above the purchase rate.
To combat illicit transactions, the CBN mandates that BDCs document all sales, including the Bank Verification Numbers (BVN) of beneficiaries, and ensure that international passports are endorsed for disbursements linked to travel allowances. Eligible transactions are limited to personal and business travel allowances, overseas tuition fees, and medical expenses, with a cap of $5,000 per transaction per quarter.
Moreover, both authorized dealer banks and BDC operators are required to comply with anti-money laundering regulations and Know Your Customer (KYC) protocols. Authorized dealer banks must submit weekly reports on their forex sales to the CBN, while BDCs are tasked with providing daily reports on their purchases and sales.
The CBN has issued a stern warning that any deviation from these guidelines by authorized dealers or BDCs could lead to sanctions, including the suspension of dealership licenses. This move is part of a broader strategy to curb speculative activities in the forex market, stabilize the naira, and ensure adherence to official foreign exchange regulations.
As these changes take effect, the CBN aims to bolster the integrity of Nigeria’s foreign exchange system, ensuring that transactions are conducted transparently and in compliance with the law.
For more information and updates on this topic, stay tuned to Newspot Nigeria.
Sources: Premium Times
