Temporary Policy to Address Holiday Forex Demand
The Central Bank of Nigeria (CBN) has announced a temporary policy allowing Bureau de Change (BDC) operators to purchase up to $25,000 in foreign exchange weekly from the newly launched Nigerian Foreign Exchange Market (NFEM). This measure, effective from December 19, 2024, to January 30, 2025, aims to meet the increased demand for forex during the holiday season.
Details of the Arrangement
According to a circular dated December 19, 2024, signed by T.G. Allu, acting for the CBN’s Trade and Exchange Department, BDCs can buy forex at the current NFEM rate. They are also required to maintain a maximum spread of 1% when selling to the public, ensuring fair pricing for retail end-users.
Operational Guidelines for BDCs
The policy stipulates that BDCs must choose a single authorized dealer for their purchases and must have fully funded their accounts prior to market access. All transactions under this temporary measure must be reported back to the CBN’s Trade and Exchange Department for transparency and oversight.
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Support for Travel Allowances
The CBN has reassured the public that both Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) will continue to be available via banks for legitimate travel and business purposes, maintaining the market-driven exchange rate within the NFEM framework.
Commitment to Market Stability
This initiative reflects the CBN’s ongoing commitment to maintaining a stable, liquid foreign exchange market, particularly by managing price volatility during peak seasonal demands.