The Central Bank of Nigeria (CBN) has extended the deadline for Bureau de Change (BDC) operators to access the Nigerian Foreign Exchange Market (NFEM) for weekly FX purchases.
In a circular signed by Dr. W.J. Kanya, the Acting Director of the Trade & Exchange Department at the CBN on Monday, the apex bank announced that the previous deadline of January 31, 2025, has now been extended to May 30, 2025.
The circular referenced an earlier directive (TED/FEM/PUB/FPC/001/030) dated December 19, 2024, which granted temporary access to BDCs to purchase foreign exchange (FX) from Authorized Dealers with a weekly cap of $25,000.
According to the CBN statement: “The expiry date of January 31, 2025, which was granted in the above-mentioned circular, has been extended to May 30, 2025. All terms and conditions in the above-mentioned circular remain unchanged.”
How will BDCs react?
The extension is expected to provide BDC operators with continued access to FX, potentially stabilizing the parallel market and improving liquidity. It also signals the CBN’s sustained intervention in managing forex supply while keeping its regulatory oversight intact.
Earlier, the President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe told Nairametrics “From inception, it came with several challenges. The banks are circumspect in implementing the directives of the Central Bank, and that has affected the takeoff. As it is coming to an end, I’m not sure any Bureau de Change operator has access to that window for now.”
He called for an extension of the policy to improve efficiency and ensure stability in the forex market. “It will be good if the CBN revisits or extends the 30th or 31st deadline for the purchase window. There is a need for the injection of liquidity into the retail end of the [forex] market because that is where volatility usually comes from.
Some experts believe that maintaining the $25,000 cap ensures controlled distribution while preventing excessive speculation in the forex market. However, concerns remain about long-term forex availability, given ongoing economic challenges and fluctuations in FX reserves.
Background on CBN’s BDC Policy
The CBN has adopted a series of reforms in the FX market, including restricting BDCs from sourcing FX directly from official channels in past years.
However, due to market volatility and the need to curb the widening gap between official and parallel exchange rates, the central bank reintroduced controlled sales of FX to BDCs in December 2024.
The move aimed at addressing liquidity shortages and discouraging hoarding or speculative activities in the market.
What This Means for BDC Operators
- For BDC operators, this extension offers continued access to FX supply, allowing them to operate within regulated guidelines.
- The decision provides a level of stability and predictability for businesses and individuals who rely on BDCs for foreign exchange transactions.
- However, with macroeconomic factors such as inflation, external reserves, and foreign investment inflows still influencing the FX market, it remains to be seen how effective this measure will be in sustaining currency stability.
