CBN Shifts Forex Sales to BDCs May 30

The Central Bank of Nigeria (CBN) has extended the temporary access granted to Bureau de Change operators for purchasing foreign exchange from the Nigerian Foreign Exchange Market till May 30.

This extension was disclosed in a circular issued on Monday by the Trade and Exchange Department of the apex bank, allowing BDCs to continue purchasing forex from authorised dealers under existing conditions.

The circular, referenced TED/FEM/PUB/FPC/001/003 and signed by Dr.

W. J. Kanya, the Acting Director of the Trade & Exchange Department, referred to an earlier directive TED/FEM/PUB/FPC/001/030 issued on December 19, 2024.The previous circular had granted temporary access to existing BDCs to source foreign exchange from authorised dealers, with a weekly cap of $25,000.

Initially set to expire on January 31, 2025, the directive has now been extended for another four months, until May 30, 2025.The CBN stated that all other terms and conditions outlined in the previous circular remain unchanged.

The extension shows the bank’s commitment to maintaining a fully functional foreign exchange market, ensuring liquidity, and addressing retail demand for eligible invisible transactions.It added that it would continue to provide liquidity when necessary to manage price volatility.The circular read, “We refer to our circular TED/FEM/PUB/FPC/001/030 dated December 19, 2024, which granted temporary access to existing BDCs to the NFEM for the purchase of FX from Authorised Dealers, subject to a weekly cap of USD25,000.00.“The expiry date of January 31, 2025, which was granted in the above-mentioned circular, has been extended to May 30, 2025. “All other terms and conditions in the above-mentioned circular remain unchanged.

“The CBN remains committed to a fully functional foreign exchange market and will continue to provide liquidity when necessary to manage price volatility.”The decision comes at a time when the country’s FX reserves are dropping fast.Nigeria’s foreign exchange reserves experienced a significant decline in January 2025, dropping by $1.11bn over the course of the month.According to data from the CBN, the country’s reserves stood at $40.88bn on January 2, but by January 30, they had fallen to $39.77bn. This represents a 2.72 percent decrease within one month.The decline in reserves follows ongoing interventions by the CBN in the foreign exchange market, as well as external debt servicing obligations and capital outflows.