CBN lifts ban on forex sale by BDCs, unveils fresh guidelines
Story from Christine TOBECHUKWU
In support of the drive to improve the efficiency of the Nigerian Foreign Exchange Market, the Central Bank of Nigeria (CBN) has lifted the ban on forex sales and unveiled a series of fresh operational guidelines for Bureau de Change (BDC) operators in the country.
The decision comes two years after the apex bank banned the sale of dollars to BDCs amid efforts to stabilise the market and safeguard the value of the naira.
The suspended governor of CBN, Godwin Emefiele, who announced the ban at a media briefing on 27 July, 2021, in Abuja, lamented that the BDC operators had abandoned the original objective of their establishment which was to serve retail end users who need $5,000 or less.
The new operational mechanism, contained in a circular dated 17 August, stated that the spread on buying and selling by BDC operators will be 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.
In the circular, signed by O.S Nnaji, the Director of Exchange Department, the bank ordered a mandatory rendition by BDC operators of the statutory periodic reports (daily, weekly, monthly, quarterly and yearly) on the Financial Institution Form Rendition System (FIFX) which it said has been upgraded to meet individual operators requirements.
READ ALSO: New Forex Policy: Make funds accessible to all players in the sector – BDC operators to CBN
This move is expected to provide more stability and transparency to exchange rate fluctuations, ultimately benefiting both BDC operators and the general public.
Meanwhile, the apex bank has issued an advisory note on the illegal activities of financial operators in the country in an effort to guide the general public against falling victim to Ponzi scheme operators and loan sharks.
While raising concerns over the increasing rates of illegal financial operators, the CBN in a statement released on its website explained that the activities of IFOs portend a grave risk to the country’s financial system.
The apex bank, through its Financial Services Regulation and Coordinating Committee (FSRCC), has asked the public to refrain from dealing with unlicensed or illegal financial operators who lure and defraud unsuspecting members of the public by offering extraordinary returns on investments.
