CBN Brings Back BDC, Introduces New Operational Mechanism
In a significant shift that marks the re-entry of Bureaus de Change (BDCs) into the country’s foreign exchange market, the Central Bank of Nigeria (CBN) has unveiled a series of operational changes for the BDCs segment. The announcement, made on August 17, 2023, outlines key measures aimed at streamlining and improving the BDC operations as well as enhancing the efficiency of the Nigerian Foreign Exchange Market. This move marks a departure from previous policies, including those enacted under the tenure of former CBN Governor Godwin Emefiele, which had temporarily excluded BDC operators from participating in the market. Under the new framework, the spread on buying and selling by BDC operators is set to fall within a permissible range of -2.5% to +2.5% of the Nigerian Foreign Exchange market window’s weighted average rate from the previous day. This move is expected to provide more stability and transparency to exchange rate fluctuations, ultimately benefiting both BDC operators and the general public. Another significant alteration is the mandatory submission of periodic financial reports by BDC operators.
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