The Central Bank of Nigeria (CBN) has announced a number of operational modifications for the Bureau De Change (BDC) segment in an effort to increase the effectiveness of the Nigerian Foreign Exchange Market.
The statement, which was released on August 17, 2023, details important steps to improve and streamline the BDC operations.
According to the new regulations, the spread on purchases and sales made by BDC operators must be within a legal range of -2.5% to +2.5% of the weighted average rate for the Nigerian Foreign Exchange Market Window from the previous day.
It is anticipated that this action will increase the stability and transparency of exchange rate fluctuations, which will eventually be advantageous to both BDC operators and the general public.
Mandatory production of recurring financial reports by BDC operators is another key change.
These reports, which can be produced in daily, weekly, monthly, quarterly, and yearly renditions, must be submitted using the improved Financial Institution Forex Rendition System (FIFX), which is adapted to each operator’s unique needs.
The goal of this modification is to improve oversight and guarantee that the BDC industry operates with better responsibility.
The circular underscores once more that failing to file accurate returns by the deadline will result in penalties, which may result in operating license revocation.
The requirement for BDC operators to file nil returns applies even when there have been no transactions throughout the applicable period, encouraging compliance and meticulous record-keeping.
We strongly advise the public and all BDC operators to get aware with and strictly abide by these new regulations.
By implementing these measures, the Central Bank of Nigeria anticipates a more robust and well-regulated BDC segment that aligns with broader efforts to enhance Nigeria’s foreign exchange market efficiency.
This action signals the return of BDCs to the nation’s foreign currency market, which is a big change.
This action represents a change from earlier regulations, such as those put in place during the administration of former CBN Governor Godwin Emefiele, which had temporarily barred BDC operators from taking part in the market.
With the new policy, the central bank is making a concerted effort to reengage BDC operators and reintegrate them into the foreign exchange market.
Source: ENigeria Newspaper
