The Central Bank of Nigeria (CBN) is considering limiting the cash payment for buying and selling foreign currencies by Bureau De Change (BDC) operators to a maximum of $500 and ensure payments above the stipulated figure is done digitally.

The apex bank disclosed this in its proposed revised regulatory guidelines for BDC operators in Nigeria published by the bank where it proposed that electronic transfer/purchase of foreign currencies are to be made to BDCs naira account.

It stated,

“Payments to customers for cash purchases of foreign currency, the equivalent of above USD500, shall be by transfer to the customer’s Naira bank account. If the customer is non- resident (whether Nigerian or not), a BDC shall issue the customer a prepaid NGN card.

Where such a card is issued, relevant maximum credit and cumulative limits, in line with relevant Know Your Customer requirements, shall apply.”

“Payments to customers for cash purchases of foreign currency of the equivalent of USD500 and below may be made in cash.”
Permissible and non-permissible activities if BDCs

According to the bank, permissible activities by BDCs include; acquisition of forex from approved sources, sales of FX in line with its guidelines, serve as cashout points for IMTOs etc.

On the other hand, the apex bank prevented BDC from engaging in street trading, account maintenance, accepting deposits and granting of loans, facilitating international outward transfers, dealing in precious stones and metals, establishing subsidiaries and others.

What you should know
The CBN in recent times have blamed the whopping depreciation of the naira to speculation with the Governor stating the naira is “undervalued” and with time return to its true value.

The apex bank in the past few months have introduced a slew of initiatives aimed at boosting liquidity in the forex market and shoring up the value of the naira.

The proposed regulation aims to sanitise the operations of BDCs, ensure the apex bank monitors the bulk of forex inflow and outflow and curb illicit flow of foreign currencies in the economy. The regulation although a proposal is subject to review overtime.

The proposal also aims to curb the perceived “dollarization” of the Nigerian economy where businesses prefer receiving payment for goods and services in Nigeria in USD rather than naira. A behaviour the apex bank has attributed to be responsible for the increase demand for FX in the country.

The Governor of the CBN had earlier called on Nigerians to moderate their demand for FX stating that FX expended on medical tourism and education in the last decade amounting to $40 billion surpass the current foreign exchange reserve.

Epstein:
The Central Bank of Nigeria (CBN) is considering limiting the cash payment for buying and selling foreign currencies by Bureau De Change (BDC) operators to a maximum of $500 and ensure payments above the stipulated figure is done digitally.

The apex bank disclosed this in its proposed revised regulatory guidelines for BDC operators in Nigeria published by the bank where it proposed that electronic transfer/purchase of foreign currencies are to be made to BDCs naira account.

It stated,

“Payments to customers for cash purchases of foreign currency, the equivalent of above USD500, shall be by transfer to the customer’s Naira bank account. If the customer is non- resident (whether Nigerian or not), a BDC shall issue the customer a prepaid NGN card.

Where such a card is issued, relevant maximum credit and cumulative limits, in line with relevant Know Your Customer requirements, shall apply.”

“Payments to customers for cash purchases of foreign currency of the equivalent of USD500 and below may be made in cash.”
Permissible and non-permissible activities if BDCs

According to the bank, permissible activities by BDCs include; acquisition of forex from approved sources, sales of FX in line with its guidelines, serve as cashout points for IMTOs etc.

On the other hand, the apex bank prevented BDC from engaging in street trading, account maintenance, accepting deposits and granting of loans, facilitating international outward transfers, dealing in precious stones and metals, establishing subsidiaries and others.

What you should know
The CBN in recent times have blamed the whopping depreciation of the naira to speculation with the Governor stating the naira is “undervalued” and with time return to its true value.

The apex bank in the past few months have introduced a slew of initiatives aimed at boosting liquidity in the forex market and shoring up the value of the naira.

The proposed regulation aims to sanitise the operations of BDCs, ensure the apex bank monitors the bulk of forex inflow and outflow and curb illicit flow of foreign currencies in the economy. The regulation although a proposal is subject to review overtime.

The proposal also aims to curb the perceived “dollarization” of the Nigerian economy where businesses prefer receiving payment for goods and services in Nigeria in USD rather than naira. A behaviour the apex bank has attributed to be responsible for the increase demand for FX in the country.

The Governor of the CBN had earlier called on Nigerians to moderate their demand for FX stating that FX expended on medical tourism and education in the last decade amounting to $40 billion surpass the current foreign exchange reserve.

https://nairametrics.com/2024/02/24/cbn-plans-to-limit-buying-and-selling-of-forex-in-cash-by-bdcs-to-500/

9jatriot:
Very good.... CBN dishing it out hot... Any thing above that should be by transfer.

That means intra bank transfer of forex should now be available.

However, it is interesting how USD has become a secondary currency in Nigeria

Biodun556:



With bureau de change reforms Tinubu is challenging the north and stepping on their toes. I will not be surprised if they are calling for coup


Obasanjo, Jonathan, Buhari knows this forex malpractice but lacks the courage to correct it

9jatriot:
They won't.

The only people wishing for a coup are PO supporters.

matify83:
The reforms in the banking and Fx sectors are coming in fast and furious at dizzying speeds.

The North may misconstrue this as an attack on their business interest but who gives a hoot as long as it brings sanity to the Fx market and stability in the naira value.

Epstein:
Yeye policies,

marenkurz:
Isn't it easier to cancel BDC? Let banks be responsible for foreign exchange.
Then, CBN will know the root of the problem.

BigIyanga:
Why does Naija need BDC? Why not go to your bank witj ur BVN,NIN, FORM-A, FORM M.. Banks vet your docs and request.. than CBN will pay the recipient on FOrm M or A… and you 90days to submit bill of lading to your banks for onward transfers to sNaija customs.

CBN should build a portal like Jamb/WAEC wheb FX disburse with Form M/A can be submitted and tracked in real time.

9jatriot:
Very good.... CBN dishing it out hot... Any thing above that should be by transfer.

That means intra bank transfer of forex should now be available.

However, it is interesting how USD has become a secondary currency in Nigeria

TheBillyonaire:
How will they know

plaetton:

Another nonsensical ad hoc policy dead on arrival.
I still fail to understand how restricting the availability of forex would help the Naira.
Nigeria is heavily dependent on imported goods, from toothpick to the very fuel we use to run our generator-economy. Therefore, forex would always be in great demand. If the supply is disrupted by ill-conceived ad hoc policies, the value of the available forex would always go up and up.

Crimecity:


Don't mind them.

They should keep clamoring for BDCs to be attacked, while refusing to solve the main issue. With this policy, the dollar will even jump. The law of demand and supply isn't for economics neophytes.

plaetton:

Another nonsensical ad hoc policy dead on arrival.
I still fail to understand how restricting the availability of forex would help the Naira.
Nigeria is heavily dependent on imported goods, from toothpick to the very fuel we use to run our generator-economy. Therefore, forex would always be in great demand. If the supply is disrupted by ill-conceived ad hoc policies, the value of the available forex would always go up and up.

Biodun556:



With bureau de change reforms Tinubu is challenging the north and stepping on their toes. I will not be surprised if they are calling for coup

Paraman:
forget all this chidish rant of coup. Nigeria is not Niger republic or Mali.

plaetton:

Another nonsensical ad hoc policy dead on arrival.
I still fail to understand how restricting the availability of forex would help the Naira.
Nigeria is heavily dependent on imported goods, from toothpick to the very fuel we use to run our generator-economy. Therefore, forex would always be in great demand. If the supply is disrupted by ill-conceived ad hoc policies, the value of the available forex would always go up and up.