Yuletide: CBN Permits BDCs to Purchase $25,000 Weekly on NFEM
The Central Bank of Nigeria (CBN) has granted Bureau de Change (BDC) operators temporary permission to purchase up to $25,000 weekly from the Nigerian Foreign Exchange Market (NFEM). This initiative, detailed in a circular dated December 19, 2024, and signed by T.G. Allu on behalf of the acting Director of the Trade and Exchange Department, is aimed at meeting the seasonal retail demand for foreign exchange during the holiday period.
The arrangement, which took effect on December 19, 2024, will remain in place until January 30, 2025. According to the circular, BDCs are allowed to buy forex from a single authorized dealer of their choice, provided their accounts are fully funded before accessing the market. Transactions will be conducted at the prevailing NFEM rate, with a maximum 1% spread permitted for retail end-users.
The CBN emphasized that all transactions under this scheme must be reported to its Trade and Exchange Department, underscoring the importance of transparency and compliance.
“To meet expected seasonal demand for foreign exchange, the CBN is allowing temporary access for all existing BDCs to the NFEM for the purchase of FX from authorized dealers, subject to a weekly cap of $25,000,” the circular stated.
The apex bank assured the public that Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) remain available through banks at market-determined exchange rates within the NFEM framework.
This move follows the CBN’s introduction of the NFEM platform, which has facilitated relative stability in the naira’s value. On Thursday, the naira appreciated to close at N1,540/$ on the NFEM, gaining N5 from Wednesday’s rate of N1,545/$. In the black market, the naira traded at N1,660/$, maintaining its stability.
The latest directive builds on a November circular titled “Revised Guidelines for the Nigeria Foreign Exchange Market,” which allowed licensed BDCs to purchase forex directly from authorized dealers for the first time in years. This step, aimed at improving liquidity in the forex market, has been instrumental in sustaining relative stability.
The CBN reiterated its commitment to maintaining a functional and liquid foreign exchange market while addressing price volatility, particularly during the high-demand Yuletide season.
