The Central Bank of Nigeria (CBN) is contemplating measures to prohibit Bureau De Change (BDC) operators from engaging in street trading and to impose a maximum cash purchase limit of $500 for selling foreign exchange (FX).
This revelation surfaced in the proposed revised regulatory guidelines for BDC operators published by the apex bank.
While the proposal to ban street trading by BDCs echoes previous guidelines outlined in 2015, the CBN underscores permissible activities for BDCs, including acquiring forex from approved sources, selling FX by guidelines, and serving as cashout points for International Money Transfer Operators (IMTOs).
Conversely, the apex bank prohibits BDCs from partaking in street trading, account maintenance, deposit acceptance, loan provision, facilitating international outward transfers, dealing in precious stones and metals, and establishing subsidiaries.
Moreover, the CBN stipulates that sellers of forex exceeding $10,000 must disclose the source of the foreign exchange while proposing to ban cash payments exceeding $500 to customers. It also suggests that customers’ digital transfer purchases of foreign currencies be directed to the BDCs’ naira accounts.
The proposed regulation aims to sanitize BDC operations nationwide, curb the proliferation of BDC operators, and empower the CBN to regulate their activities effectively. However, it remains a proposal subject to ongoing review.
In recent months, the CBN has attributed the significant depreciation of the naira to speculation, with the Governor affirming that the naira is undervalued and expected to return to its true value over time.
To address these challenges, the apex bank has introduced various initiatives to enhance liquidity in the forex market and stabilize the value of the naira.
The proposed regulatory framework signifies efforts to formalize the BDC industry and enhance oversight, aligning with ongoing crackdowns by security agencies on street traders of foreign currencies. Additionally, reports indicate restrictions on Nigerian traders’ access to forex trading platforms such as Binance, signalling intensified efforts to regulate the forex market and ensure compliance with regulatory standards.
