The Central Bank of Nigeria has issued changes to the operational guidelines to Bureau De Change Operators in the country. In the announcement made by the apex bank via a circular, the new changes were issued to improve the efficiency of the Nigerian Foreign Exchange market.
Changes include the following:
- The spread on buying and selling by BDC operators shall be within an allowable limit of -2.5% to +2.5% of the Nigerian Foreign Exchange market window weighted average rate of the previous day.
- Mandatory rendition by BDC Operators of the statutory periodic reports (daily, weekly, monthly, quarterly and yearly) on the Financial Institution Forex Rendition System (FIFX) which has been upgraded to meet individual Operator’s requirements
- Operators are to note that with effect fron the date of this circular, non-rendition of returns would attract snactions which may include withdrawal of operating license. Where operators do not have any transaction within the period, they are expected to render nil returns
Under the leadership of the recently inaugurated Tinubu-led administration, the Nigerian government has been exploring various strategies to harmonize the official and black market exchange rates of the Dollar which is hovering around N150. As such, this recent circular suggests a potential reconsideration of the decision to halt the sale of Foreign Exchange to Bureau De Change operators, a policy originally put in place by the previous CBN governor, Godwin Emefiele, in 2021.
The perspective of the CBN revolves around the notion that Bureau De Change (BDC) operators possess the potential to augment the FX supply within the market, consequently alleviating the strain on exchange rates. Historically, BDCs have leveraged arbitrage opportunities and the presence of multiple exchange channels in Nigeria to their advantage.
So one wonders whether the new changes and the possible re-introduction of FX sales to BDCs would close the gap between the two rates.
