CBN allows BDCs $25,000 weekly FX access to NAFEM

The Central Bank of Nigeria (CBN) has announced a temporary measure allowing eligible Bureau De Change (BDC) operators access to the Nigerian Autonomous Foreign Exchange Market (NAFEM) for weekly foreign exchange (FX) purchases of up to $25,000.

The policy, aimed at addressing seasonal FX demand, commenced on December 19, 2024, and will remain effective until January 30, 2025.

This development was disclosed in a circular issued by the Acting Director of the Trade and Exchange Department at CBN, T.G. Allu, dated December 19, 2024.

“In order to meet expected seasonal demand for foreign exchange, the CBN is allowing a 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, and January 30, 2025.”

Maintain a maximum pricing spread of 1% when offering FX to retail end-users.

All transactions conducted under this arrangement must be reported to the CBN’s Trade and Exchange Department.

The move is part of the CBN’s strategy to stabilize FX supply and address seasonal spikes in demand. Authorised dealers, which include CBN-licensed banks, are empowered to sell FOREX to BDCs under the new arrangement.

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The CBN emphasized that Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) transactions remain available through banks, ensuring that Nigerians can access FX for legitimate travel-related needs.

The CBN underscored its commitment to maintaining a functional and transparent foreign exchange market.

“All legitimate and eligible foreign exchange transactions are expected to be completed in the NFEM at the market-determined exchange rate,” the circular added.

The apex bank reaffirmed its dedication to providing liquidity when necessary to manage price volatility and ensure market stability.

The temporary access granted to BDCs is expected to alleviate FX shortages typically experienced during the holiday season, while also helping to stabilize the exchange rate.

By capping weekly purchases at $25,000 per BDC, the CBN aims to balance supply with demand and discourage speculative activity.

This measure reflects the CBN’s broader commitment to reforming Nigeria’s FX market. The bank has been gradually transitioning to a more flexible, market-determined exchange rate system, aligning with international best practices.

With the holiday season in full swing, the intervention is anticipated to provide relief to businesses and individuals requiring FX, while maintaining the integrity of Nigeria’s financial system.

This policy underscores the CBN’s ongoing efforts to address Nigeria’s foreign exchange challenges, ensure adequate liquidity, and promote economic stability.