CBN Sets $150,000 Weekly FX Limit for BDCs

The Central Bank of Nigeria (CBN) has approved weekly foreign exchange sales of up to $150,000 to each licensed Bureau De Change (BDC) operator.

CBN’s circular, signed by Musa Nakorji, Director of the Trade and Exchange Department, on Tuesday, states that the move is intended to “ensure the availability of adequate foreign exchange liquidity in the retail segment of the foreign exchange market to meet the legitimate needs of end users.”

Under the directive, all BDCs duly licensed by the CBN are allowed to access foreign exchange from the Nigerian Foreign Exchange Market (NFEM) through any Authorised Dealer of their choice at prevailing exchange rates.

“This is to inform market participants that all BDCs that are duly licensed by the CBN are allowed to access foreign exchange from the NFEM through any Authorised Dealer of their choice, at the prevailing exchange rate,” CBN said.

CBN added that sales to BDCs will be “for utilisation in line with the existing BDC Guidelines, subject to a maximum of USD150,000 per week for each BDC.”

To strengthen oversight, Authorised Dealers are required to conduct “the necessary KYC and due diligence for their BDC clients in line with applicable regulations and the internal risk management framework” before completing any transaction.

The CBN also directed that “all licensed BDCs shall ensure the timely and accurate submission of returns to the Central Bank electronically, and in accordance with extant regulations.”

On the handling of unused funds, the apex bank said, “Any unutilised balances are expected to be sold back to the market within 24 hours (BDCs are not permitted to keep funds purchased from NFEM in their positions).”

CBN added that “Settlement of foreign exchange transactions by BDCs with Authorised Dealers and/or with end-user customers shall be conducted exclusively through settlement accounts held with licensed financial institutions.

“Third-party transactions are prohibited, and settlement of foreign exchange sales in cash is limited to a maximum of 25% of each transaction amount.”