The Central Bank of Nigeria (CBN) has introduced new guidelines allowing licensed Bureaux de Change (BDCs) to directly buy foreign exchange from Authorized Dealers. This pivotal change aims to enhance the efficiency of Nigeria’s foreign exchange market and ensure the naira reflects its true value.
The revised guidelines cover a wide range of regulatory and operational aspects, touching on the roles of Authorized Dealers, Bureaux de Change (BDCs), pricing mechanisms, interbank trading, compliance, and reporting standards.
BDCs are now allowed to buy FX directly from Authorized Dealers, subject to a monthly cap set by the CBN.
“Bureaux de Change (BDCs) operators licensed under the revised guidelines (ref FPRD/DIR/PUB/CIR/002/010 issued on May 22, 2024) are permitted to buy foreign exchange from Authorised Dealers to meet their customer needs, subject to the aggregate monthly cap stipulated by the CBN.”
“All foreign exchange transactions consummated with Authorised Dealers, Bureaux de Change operators and International Money Transfer Operators (IMTOs) are strictly subject to the terms of their respective licenses.”
“All market participants are expected to adhere to the highest code of ethics and professional conduct in all their dealings in the foreign exchange market in line with the Nigerian FX Code.”
Outlined in the CBN circular titled “Revised Guidelines for the Nigeria Foreign Exchange Market (NFEM)” issued on November 29, 2024, the updated regulations encompass various operational and regulatory elements, including the roles of Authorized Dealers and pricing mechanisms.
Key Highlights:
• BDCs can now purchase FX directly from Authorized Dealers for the first time in years, with a monthly transaction cap set by the CBN.
• All transactions must comply with licensing terms and adhere to the Nigerian FX Code’s ethical standards.
• The move is expected to alleviate FX pressures for individuals and small businesses relying on BDC services, expanding their operational scope while ensuring effective market monitoring.
Under the revised framework, FX pricing will now be centralized through the Electronic Foreign Exchange Matching System (EFEMS).
The CBN will publish daily transactional rates, ensuring that market participants, including BDCs, have access to reliable data.
Authorized Dealers, including Commercial and Merchant Banks, must report FX transactions within 10 minutes via APIs, allowing for real-time monitoring. BDCs, too, must adopt technology platforms for seamless reporting.
By integrating BDCs into the official market framework and ensuring rigorous compliance with reporting and pricing standards, the CBN hopes to bridge gaps in retail FX access while minimizing market distortions.
