- Weekly Limit: BDCs can now buy up to $25,000 each week.
- Duration: This special access lasts from December 19, 2024, to January 30, 2025.
- Why the Change?: To handle increased forex demand during the holiday season.
- How to Participate?: BDCs must use one authorized dealer and fund their account beforehand.
- Pricing: A maximum 1% spread is allowed for retail users.
CBN’s Holiday Forex Gift to BDCs
In a surprising move, the Central Bank of Nigeria (CBN) has temporarily opened the Nigerian Foreign Exchange Market (NFEM) to Bureau de Change (BDC) operators. Starting December 19, 2024, and running through January 30, 2025, BDCs can purchase up to $25,000 weekly. This decision, announced in a circular signed by T.G. Allu of the CBN’s Trade and Exchange Department, is designed to meet the increased demand for foreign currency during the festive season.
The Details You Need to Know
The CBN isn’t just throwing money around; there are specific guidelines. BDCs are required to select just one authorized dealer for their transactions. They also must fully fund their accounts before they can access the market at the going NFEM rate. Every single transaction has to be reported to the CBN’s Trade and Exchange Department. Furthermore, a cap of 1% is placed on the pricing markup that BDCs can apply when selling to retail customers.
The Impact on You
What does this mean for the average person? Well, if you’re planning on traveling or need foreign currency for business, this could make things a little easier. The CBN has also reassured the public that Personal Travel Allowance and Business Travel Allowance are still available through banks for those with legitimate needs. Previously, the CBN had granted BDCs permission to buy forex directly from authorized dealers, and this new development seems to build on that.
Why Now?
The holiday season usually sees a spike in travel and other forex needs, hence the CBN’s decision to take this measure. This temporary move to increase access to foreign exchange for BDCs is a calculated step to try to smooth out the flow of currency during this busy period, ensuring that seasonal demand can be met without major disruptions.
Other Related News
The timing of this announcement comes with a bit of context. Earlier, there was some controversy surrounding the CBN’s withholding of its annual report, raising a few eyebrows. As of recent news, the Nigerian Navy has also promoted 146 senior officers, and the Kwara State government has presented its budget for 2025.
In conclusion, this move by the CBN could have a significant impact, both on the forex market and on the average Nigerian citizen who needs access to foreign currency. Only time will tell what the full effects will be. Stay tuned for further updates as this story unfolds.
