The Central Bank of Nigeria (CBN) has officially extended the deadline for Bureau de Change (BDC) operators to access the Nigerian Foreign Exchange Market (NFEM) for weekly foreign exchange (FX) purchases.
In a circular signed by Dr. W.J. Kanya, Acting Director of the Trade & Exchange Department, on Monday, the apex bank confirmed that the initial deadline of January 31, 2025, has now been moved to May 30, 2025.
The announcement references an earlier directive (TED/FEM/PUB/FPC/001/030) issued on December 19, 2024, which granted BDCs temporary access to purchase FX from Authorized Dealers with a weekly cap of $25,000. The circular states:
“The expiry date of January 31, 2025, which was granted in the above-mentioned circular, has been extended to May 30, 2025. All terms and conditions in the above-mentioned circular remain unchanged.”
The extension is anticipated to provide BDC operators with continued access to FX, potentially stabilizing the parallel market and improving liquidity. This move reinforces the CBN’s commitment to managing forex supply while maintaining regulatory oversight.
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Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria (ABCON), expressed concerns regarding the effectiveness of the initial deadline. Speaking to Nairametrics, he stated:
“From inception, it came with several challenges. The banks are circumspect in implementing the directives of the Central Bank, and that has affected the takeoff. As it is coming to an end, I’m not sure any Bureau de Change operator has access to that window for now.”
He advocated for the extension of the policy to enhance efficiency and stability within the forex market, emphasizing the need for increased liquidity in the retail segment of the market.
While the $25,000 cap is designed to ensure controlled FX distribution and mitigate excessive speculation, concerns persist over long-term forex availability, given Nigeria’s economic challenges and fluctuations in FX reserves.
The CBN has implemented various reforms in the FX market over the years, including restricting BDCs from sourcing FX directly from official channels.
However, in response to market volatility and the widening gap between official and parallel exchange rates, the central bank reintroduced controlled FX sales to BDCs in December 2024 to address liquidity shortages and curb speculative trading.
For BDC operators, this extension offers an opportunity to continue sourcing FX within regulated guidelines, providing a level of predictability for businesses and individuals who depend on BDCs for foreign exchange transactions.
However, macroeconomic factors such as inflation, foreign reserves, and investment inflows will continue to influence the broader effectiveness of this measure.
As Nigeria navigates its forex challenges, industry stakeholders will be watching closely to assess the impact of this extension on market stability and currency performance.