CBN Tightens Rules on Forex Sales, Sets $25,000 Weekly Limit for BDCs

In a bid to streamline foreign exchange transactions, the Central Bank of Nigeria (CBN) has issued new regulations restricting Bureau de Change (BDC) operators to purchasing a maximum of $25,000 per week from a single bank.

This move comes after an initial directive on December 20, 2024, which allowed BDCs to source foreign exchange (FX) from banks between December 19, 2024, and January 30, 2025. However, in a revised circular issued on Monday, the CBN extended the timeframe to May 30, 2025.

The latest directive, signed by W.J. Kanya, acting director of the trade and exchange department, outlines stricter guidelines on FX procurement and sales by BDCs.

Single-Bank Rule: BDCs must select one authorized dealer bank (ADB) to purchase their weekly FX allocation. Any attempt to bypass this rule will result in sanctions.

Selling Rate Regulation: Banks selling to BDCs must adhere to the prevailing Nigerian Foreign Exchange Market (NFEM) window rate. Profit Margin Cap: BDCs can only resell FX at a maximum margin of one per cent above the purchase price, irrespective of the FX source.

Additionally, banks must submit weekly reports on FX sales to BDCs, while BDC operators must render daily reports through the CBN’s forex reporting system (FIFX).

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CBN has also specified the purposes for which BDCs can disburse FX, limiting transactions to business travel allowance, personal travel allowance, overseas tuition fees, and overseas medical bills. Each transaction is capped at $5,000 per quarter.

To ensure transparency, BDCs must maintain detailed transaction records, including capturing the beneficiary’s Bank Verification Number (BVN) and endorsing the amount disbursed in the customer’s international passport.

The CBN has warned that any violation of these guidelines—including fund diversion—will lead to strict sanctions, which may include the suspension of dealership licenses. Furthermore, all transactions must comply with anti-money laundering regulations and Know Your Customer (KYC) protocols.