CBN Approves $150,000 Weekly FX Sales to BDCs to Boost Retail Market Liquidity

Kingsley Ohens reporting For Urbanscoopnews

The Central Bank of Nigeria (CBN) has approved the participation of licensed Bureau De Change (BDC) operators in the Nigerian Foreign Exchange Market (NFEM), authorising each operator to purchase up to $150,000 weekly in foreign exchange as part of efforts to enhance liquidity in the retail segment of the market.

The directive, contained in a circular signed by the Director of the Trade and Exchange Department, Musa Nakorji, permits all duly licensed BDCs to access foreign exchange through any Authorised Dealer Bank of their choice at prevailing market rates. The initiative is aimed at broadening access to foreign currency, meeting legitimate retail demand, and improving overall market efficiency.

Under the new framework, weekly foreign exchange purchases by each BDC are capped at $150,000, with utilisation required to comply strictly with existing operational guidelines governing BDC activities. Authorised Dealer Banks are mandated to conduct comprehensive Know-Your-Customer (KYC) procedures and due diligence checks before executing any foreign exchange sale, reinforcing regulatory oversight and risk management standards.

To strengthen transparency and accountability, the CBN directed that all licensed BDCs must submit timely and accurate electronic returns in line with extant regulations. BDCs are prohibited from holding foreign exchange positions acquired from the NFEM, and any unutilised funds must be resold to the market within 24 hours.

The circular also imposes tighter settlement requirements. All foreign exchange transactions must be conducted through settlement accounts with licensed financial institutions, while third-party transactions are expressly prohibited. Cash settlements are limited to a maximum of 25 per cent of the value of each transaction.

The policy forms part of the CBN’s broader strategy to stabilise Nigeria’s foreign exchange market by improving liquidity at the retail level while maintaining strict regulatory safeguards. By integrating BDCs more formally into the foreign exchange framework under enhanced supervision, the apex bank seeks to reduce market distortions, discourage speculative practices, and ensure that foreign exchange is channelled toward legitimate economic needs. Market analysts say the effectiveness of the measure will depend largely on compliance, enforcement, and sustained market confidence.