CBN allows BDCs to purchase $25,000 weekly to meet yuletide demand
Currencies
Abdullateef Fowewe
The Central Bank of Nigeria has allowed Bureau de Change operators to purchase up to $25,000 weekly in foreign exchange from the Nigerian Foreign Exchange Market.
This temporary arrangement, designed to meet the increased demand for foreign exchange during the festive season, will run from December 19, 2024, to January 30, 2025.
This was made known in a circular signed by T.G. Allu on behalf of the CBN’s acting Director of the Trade and Exchange Department.
The circular stated that the initiative aims to address seasonal retail demand for forex during the holiday period, noting that transactions would be conducted at the prevailing NFEM rate, with BDCs mandated to maintain a maximum 1 per cent spread when pricing forex for retail customers.
All transactions under this scheme must be reported to the CBN’s Trade and Exchange Department.
The circular read, “To meet expected seasonal demand for foreign exchange, the CBN is allowing 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.
“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 1 per cent is allowed on the pricing offered by BDCs to retail end-users.”
However, the apex bank reassured the public that Personal Travel Allowance and Business Travel Allowance remain accessible through banks for legitimate travel and business purposes.
These transactions will occur at market-determined exchange rates within the NFEM framework, with the apex bank emphasizing its commitment to a fully functional and liquid foreign exchange market while managing price volatility.
