CBN BDC forex policy allowing $150,000 weekly purchases is expected to boost liquidity, narrow rate gaps and support a stronger naira

Financial market analysts on Tuesday linked an optimistic naira outlook to the CBN BDC forex policy after the Central Bank of Nigeria allowed licensed Bureau de Change operators to purchase up to 150,000 dollars weekly to improve retail foreign exchange liquidity.

Also read: CBN Approves $150,000 Weekly FX Sales to BDCs

In a circular signed by Dr Musa Nakorji, Director of the Trade and Exchange Department, and addressed to authorised dealer banks and the general public, the Central Bank of Nigeria said the measure was designed to meet legitimate end-user demand and strengthen liquidity in the retail segment of the market.

Tunde Amolegbe, Chief Executive Officer of Arthur Stevens Asset Management, said improved forex availability through the Bureau de Change window would likely support further appreciation of the naira against the United States dollar.

Tunde Amolegbe explained that a firmer currency would ease cost pressures on manufacturers and import-dependent firms, particularly in the consumer goods and industrial sectors where inputs are largely dollar denominated.

Ayotunde Olubunmi, Head of Financial Institutions at Agusto and Co., described the development as part of broader efforts by the Central Bank of Nigeria to address distortions in the foreign exchange market, especially the gap between official and parallel market rates.

Ayotunde Olubunmi said greater liquidity in the Bureau de Change segment should reduce speculative pressure, moderate margins, and promote a more unified exchange rate environment.

Tilewa Adebajo, Chief Executive Officer of CFG Advisory, noted that widening the distribution channels for foreign exchange would aid rate stabilisation across the market.

The Central Bank of Nigeria also imposed strict transparency requirements on operators. The circular directed that all licensed Bureau de Change operators must submit timely electronic returns in line with existing regulations.

The apex bank further mandated that Bureau de Change operators sell back any unutilised balances within 24 hours and prohibited them from holding positions funded through the Nigerian Foreign Exchange Market.

According to the circular, all settlements must be conducted through accounts held with licensed financial institutions, third-party transactions are barred, and cash settlements are limited to 25 per cent of each transaction value.

Also read: CBN Approves BDC Access to FX Market With Limits

In December, the Central Bank of Nigeria granted final licences to 82 Bureau de Change operators and cautioned the public against dealing with unlicensed operators.