The Central Bank of Nigeria (CBN) has announced an extension to the temporary access granted to Bureau de Change (BDC) operators to purchase foreign exchange from the Nigerian Foreign Exchange Market (NFEM). BDCs will now be able to access up to $25,000 weekly until May 30, 2025.
This extension, detailed in a circular released Monday by the CBN’s Trade and Exchange Department, revises the previous deadline of January 31, 2025. The directive, referenced TED/FEM/PUB/FPC/001/003 and signed by Dr. W. J. Kanya, acting Director of the Trade & Exchange Department, reaffirms all other conditions outlined in the original circular (TED/FEM/PUB/FPC/001/030) issued on December 19, 2024, remain unchanged.
The CBN’s move aims to maintain a functional forex market, ensuring liquidity and addressing retail demand for eligible invisible transactions. The bank reiterated its commitment to intervening in the market to manage price volatility.
This decision comes amidst a decline in Nigeria’s foreign exchange reserves. Data from the CBN reveals a $1.11 billion drop in reserves during January 2025, falling from $40.88 billion on January 2nd to $39.77 billion by January 30th. This represents a 2.72% decrease within one month, likely due to market interventions, debt servicing, and capital outflows.
Despite the naira’s appreciation during January, the reserve reduction suggests the CBN may have utilized its forex holdings to stabilize the currency and manage liquidity. By continuing BDC access to forex, the CBN intends to bolster retail market liquidity, enabling BDCs to meet demands for personal and business transactions.
Over the past year, the CBN has implemented various measures to regulate forex access and curb speculation, including stricter BDC oversight, regulatory compliance enforcement, and exchange rate unification reforms. This latest extension reflects a measured approach to managing forex demand and maintaining market stability.
Reform: CBN Extends $25,000 Weekly Forex Sales to BDCs Until May 30th
