CBN Approves Weekly $25,000 Purchase for BDCs from Banks

• The Central Bank of Nigeria allows Bureau De Change operators to purchase $25,000 weekly from the Nigerian Autonomous Foreign Exchange Market
• This temporary access aims to meet seasonal foreign exchange demand from December 19, 2024, to January 30, 2025

The Central Bank of Nigeria (CBN) has granted temporary approval for eligible Bureau De Change (BDC) operators to access the Nigerian Autonomous Foreign Exchange Market (NAFEM).

Under this arrangement, BDCs can purchase $25,000 weekly from authorised dealers starting December 19, 2024.

This initiative aims to meet the retail market’s seasonal demand for foreign exchange (FX). The Acting Director of Trade and Exchange at the CBN, T.G. Allu, announced the decision in a December 19, 2024 circular.

The circular stated: “To address expected seasonal FX demand, the CBN is granting temporary access for all existing BDCs to NAFEM to buy FX from authorised dealers, with a weekly cap of $25,000.

This window will be available from December 19, 2024, to January 30, 2025.”

BDC operators must fund their accounts fully before accessing the market and are limited to purchasing FX from one authorised dealer of their choice.

All transactions must be reported to the Trade and Exchange Department, with a maximum spread of 1% allowed for pricing to retail customers.

Additionally, the CBN confirmed that Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) remain accessible from banks to meet legitimate travel needs.

“All legitimate FX transactions will continue to be completed in NAFEM at market-determined rates. The CBN is committed to ensuring a functional FX market and will intervene when necessary to manage price volatility,” the circular concluded.

This move highlights the CBN’s efforts to stabilize the FX market and address increased seasonal demand during the holiday period.