|
Listen to article
|
The Central Bank of Nigeria (CBN) on Tuesday authorised licensed Bureau De Change (BDC) operators to participate directly in the Nigerian Foreign Exchange Market (NFEM), permitting each operator to purchase up to $150,000 weekly. The circular, issued by the apex bank, is aimed at improving foreign currency availability and narrowing the widening gap between official and parallel market exchange rates.
Signed by Dr. Musa Nakorji, Director of the Trade and Exchange Department, the directive, dated February 10, 2026, was addressed to authorised dealer banks and made public. According to the bank, the move targets “adequate foreign exchange liquidity in the retail segment of the market to meet the legitimate needs of end users.”
“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, all BDCs 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,” the circular stated.
The CBN stressed that authorised dealers must complete full Know-Your-Customer (KYC) and due diligence checks before selling foreign currency to BDCs. “Authorised dealers are required to complete the necessary KYC and due diligence for their BDC clients in line with applicable regulations and the internal risk management framework,” it said.
Once these requirements are satisfied, BDCs may purchase foreign exchange strictly in accordance with operational guidelines, subject to a weekly ceiling of $150,000. The bank also mandated that BDCs submit returns electronically in a timely and accurate manner, in line with existing regulations, reinforcing accountability and transparency.
To curb hoarding and speculative activity, the central bank ordered that unutilised foreign exchange must be returned to the market within 24 hours. “BDCs are not permitted to keep funds purchased from NFEM in their positions,” the circular said, underlining the need to prevent market distortions.
Settlement procedures were tightened as well. All foreign exchange transactions by BDCs must be routed through settlement accounts held with licensed financial institutions. Third-party transactions are prohibited, and cash settlements are restricted to no more than 25% of each transaction. The CBN said these measures are intended to maintain oversight while expanding access for BDC operators.
Market analysts said the policy could help narrow the disparity between the official exchange rate and the parallel market, which recently widened by more than N90 per dollar, marking the largest gap in three years.
Read also: CBN Staff Accepts Disappearance Of $6.2M Under Emefiele
The circular comes after months of tension over dollar access for BDC operators. In October 2025, the President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadebe, told local media that the suspension of dollar sales by the CBN had made operations difficult. Operators had been forced to rely solely on walk-in customers to source dollars, limiting their ability to meet demand.
Earlier in 2025, the CBN had imposed a ceiling of $25,000 per week per BDC from a single authorised dealer. That cap was part of broader measures to regulate retail foreign exchange sales and enhance market transparency. However, the suspension of BDC access left operators struggling to maintain liquidity.
The new $150,000 weekly limit represents a significant expansion, signaling the apex bank’s intention to ease constraints while still enforcing regulatory oversight. The CBN emphasised that existing BDC guidelines remain in force, highlighting a careful balance between market liberalisation and risk management.
“The directive provides a framework for wider participation in the NFEM while ensuring compliance with operational and reporting standards,” said an economist familiar with the central bank’s policies. “It could help reduce speculative pressure in the parallel market and increase dollar availability for legitimate end users.”
The CBN’s circular also underscores the continued monitoring of BDC transactions. By mandating electronic submission of returns, the bank aims to track sales, purchases, and utilisation of foreign exchange in real time. Analysts say this measure will strengthen market transparency and allow authorities to respond quickly to irregular activity.
Read further: CBN Staff Accepts Disappearance Of $6.2M Under Emefiele
Industry observers noted that the new arrangement may particularly benefit regions where BDCs play a critical role in serving small and medium-sized businesses, as well as individuals who rely on official channels for foreign currency.
“The move is likely to relieve pressure on retail foreign exchange demand and create a more stable environment for operators,” said a banking sector source who requested anonymity. “Previously, access to foreign currency was constrained, forcing BDCs and customers to turn to the parallel market.”
The CBN also reinforced the requirement that BDCs cannot engage in third-party transactions, a measure aimed at preventing misuse of funds. Cash settlement limits of 25% of transaction values are intended to reduce liquidity risks and limit unmonitored cash flows in the retail foreign exchange segment.
With these changes, the apex bank appears to be seeking a controlled reopening of the market for BDC operators, expanding access while maintaining stringent oversight. By raising the weekly purchase limit, the CBN intends to address structural challenges that have driven up the official-parallel market spread, while curbing speculative practices that can destabilise the currency market.
The move follows broader efforts by the central bank to stabilise the naira, improve foreign exchange liquidity, and support businesses and individuals who depend on official market access. Analysts said the impact will depend on consistent enforcement of KYC, reporting rules, and limits on unutilised balances.
In practical terms, BDC operators will now be able to source dollars directly from authorised dealer banks for redistribution to retail clients, potentially improving access and reducing reliance on the informal market. Officials and industry participants are expected to monitor the market closely in the coming weeks to evaluate the effect of the policy on the naira’s exchange rate and on overall foreign exchange availability.
