The Central Bank of Nigeria (CBN) has granted an extension to Bureau de Change (BDC) operators, allowing them to continue purchasing foreign exchange from the Nigerian Foreign Exchange Market (NFEM) until May 30, 2025. This extension was confirmed through a circular issued by the CBN’s Trade and Exchange Department on Monday, maintaining the same conditions as previously outlined.
In the circular, referenced TED/FEM/PUB/FPC/001/003 and signed by Dr. W. J. Kanya, the acting Director of the department, the CBN reaffirmed that the weekly cap for forex sales to BDCs would remain at $25,000. This access was initially granted in December 2024, with the directive set to expire on January 31, 2025, but has now been extended for an additional four months.
The CBN explained that all other terms and conditions previously set under directive TED/FEM/PUB/FPC/001/030 remain unchanged. The central bank emphasized its commitment to maintaining a fully operational foreign exchange market, supporting liquidity, and addressing retail demand for eligible transactions.
In light of the extension, the CBN reiterated its dedication to ensuring liquidity in the forex market and managing price volatility through continuous interventions when necessary. The decision also reflects the bank’s broader strategy to ensure a functional and stable exchange market for both personal and business-related transactions.
This announcement comes at a time when Nigeria’s foreign exchange reserves have been experiencing a significant decline. According to the CBN, Nigeria’s foreign reserves dropped by $1.11 billion in January 2025, falling from $40.88 billion on January 2 to $39.77 billion by January 30. This represents a 2.72% decrease in just one month.
The decline in reserves is attributed to various factors, including ongoing interventions by the CBN in the forex market, external debt servicing obligations, and capital outflows. Despite this drop in reserves, the naira showed signs of appreciation in the same period, which suggests that the CBN may have used some of its forex reserves to stabilize the local currency and manage liquidity in the official market.
By extending the forex sale arrangement for BDCs, the CBN aims to further enhance liquidity at the retail level of the forex market, ensuring that BDCs can continue to meet the demand for foreign currency in both personal and business transactions.
In recent months, the CBN has implemented a series of measures to regulate forex access, curb speculation, and strengthen the oversight of BDC operations. These efforts have included enforcing regulatory compliance, as well as reforms aimed at unifying exchange rates to reduce volatility.
The extension of forex sales to BDCs signals the CBN’s continued commitment to managing forex demand, stabilizing the exchange rate, and ensuring that the Nigerian forex market remains functional and resilient amid ongoing challenges.