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With the objective of bolstering the operational efficiency of the Nigerian Foreign Exchange Market, the Central Bank of Nigeria (CBN) has introduced a series of operational modifications for the Bureau De Change (BDC) sector.
The declaration, disclosed on August 17, 2023, lays out essential measures designed to streamline and enhance BDC operations.
Under the updated framework, the range of permissible spread for buying and selling by BDC operators is now set at -2.5% to +2.5% of the previous day’s weighted average rate in the Nigerian Foreign Exchange market window.
This adjustment is projected to bring increased stability and transparency to exchange rate fluctuations, benefiting both BDC operators and the general public.
Another significant change is the obligatory submission of periodic financial reports by BDC operators.
These reports, encompassing daily, weekly, monthly, quarterly, and yearly submissions, must be provided through the enhanced Financial Institution Forex Rendition System (FIFX), customized to meet the distinct requirements of each operator.
This alteration aims to bolster oversight and ensure heightened accountability within the BDC sector.
The circular underscores that failure to submit accurate reports within the stipulated timeframe will incur penalties, potentially leading to the revocation of operating licenses.
Even in instances where BDC operators have conducted no transactions during a specific period, they are still required to submit nil reports, fostering a culture of adherence and meticulous record-keeping.
All BDC operators and the public are urged to acquaint themselves with these novel directives and rigorously adhere to them.
Through the implementation of these measures, the Central Bank of Nigeria envisions a more robust and well-regulated BDC segment that aligns with broader initiatives to enhance the efficiency of Nigeria’s foreign exchange market.
Implications of these Changes
Significantly, this move signals the reentry of BDCs into the country’s foreign exchange market.
This policy shift deviates from past strategies, including those enacted during the tenure of former CBN Governor Godwin Emefiele, which had temporarily excluded BDC operators from market participation.
The new policy reflects a concerted endeavor by the central bank to reinvolve BDC operators and reintegrate them into the foreign exchange landscape.