The Central Bank of Nigeria (CBN) has announced a series of operational modifications for the Bureau De Change (BDC) segment in an effort to improve the efficiency of the Nigerian Foreign Exchange Market.
The August 17, 2023 statement covers significant initiatives aimed at streamlining and strengthening BDC operations.
The differential on buying and selling by BDC operators is set to fall within a permissible range of -2.5% to +2.5% of the previous day’s weighted average rate in the Nigerian Foreign Exchange market window under the new framework.
This action is likely to improve the stability and transparency of exchange rate swings, benefiting both BDC operators and the general public.
Another significant alteration is the mandatory submission of periodic financial reports by BDC operators.
These reports, including daily, weekly, monthly, quarterly, and yearly renditions, are to be submitted through the upgraded Financial Institution Forex Rendition System (FIFX), tailored to meet the specific requirements of each operator. This change aims to enhance oversight and ensure that the BDC sector operates with greater accountability.
The circular further emphasizes that failure to submit accurate returns within the specified timeframe will result in sanctions, potentially leading to the withdrawal of operating licenses. Even in cases where BDC operators have had no transactions during a given period, they are required to submit nil returns, thereby fostering a culture of compliance and thorough record-keeping.
All BDC operators and the public are urged to familiarize themselves with these new guidelines and adhere to them meticulously.
By implementing these measures, the Central Bank of Nigeria anticipates a more robust and well-regulated BDC segment that aligns with broader efforts to enhance Nigeria’s foreign exchange market efficiency.