CBN Bans Off-market Forex Negotiations, Sets New Rules for BDCs
- The CBN has declared a ban on conducting foreign exchange transactions outside the officially designated markets
- Licensed Bureau de Change (BDC) operators are authorised to source forex from approved dealers to cater to their customers' demands
- All forex market participants are expected to uphold the highest standards of ethics and professionalism in their operations
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the Stock Market.
The Central Bank of Nigeria (CBN) has prohibited the negotiation of exchange rates with customers outside the designated foreign exchange market.
It further mandated that all customer transactions be conducted exclusively with entities properly licensed to operate within the foreign exchange market, in line with their specific licence provisions.
Source: UGC
Additionally, Bureau de Change (BDCs) are now allowed to purchase foreign currency from authorised dealers to cater to their customers, provided they adhere to the monthly transaction cap set by the CBN.
CBN ends unlicensed FX transactions
In a circular identified as ‘FMD/DIR/CON/OGC/040/0012’ and signed by Dr. Omolara Omotunde Duke, Director of the Financial Markets Department at the CBN, it was stated that the permission applies to BDCs licensed under the updated guidelines referenced ‘FPRD/DIR/PUB/CIR/002/010,’ issued on May 22, 2024.
The CBN stated:
"All legitimate foreign exchange transactions in the NFEM must be concluded with an authorised dealer and any dealings with unauthorised intermediaries is hereby prohibited."
The document emphasised that all foreign exchange transactions carried out with authorised dealers, BDC operators, and international money transfer operators (IMTOs) must strictly comply with the terms of their respective licences.
The CBN also urged market participants to uphold the highest standards of ethics and professionalism in their dealings, aligning with the Nigerian FX Code.
The CBN stated that the pricing of foreign exchange transactions within the Nigerian Foreign Exchange Market (NFEM) will be conducted through the Electronic Foreign Exchange Matching System (EFEMS).
Also, all interbank transactions are required to be finalised on the EFEMS to ensure full transparency and compliance with both the EFEMS rules and the Nigerian FX Code issued by the CBN.
It would be recalled that a few weeks ago, the CBN had directed all banks in the interbank FX market to move to the Bloomberg BMatch system for forex trading.
CBN to re-launches website with new features, contents
Meanwhile, Legit.ng earlier reported that the CBN unveiled its newly redesigned website which went live on Monday, December 2, 2024.
The Apex Bank announced that the redesigned site is mobile responsive, ensuring compatibility with a wide range of devices and web browsers for greater accessibility.
The CBN added that it also features new content aimed at providing deeper insights into the CBN’s mandate and activities.
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Source: Legit.ng
