CBN orders BDCs to limit forex profit to 1.5%

The Central Bank of Nigeria, CBN, has instructed Bureau De Change, BDC. operators to cap their foreign exchange sales at a 1.5% profit margin, effective immediately. 

This directive, outlined in a circular signed by Aliyu Mahdi, Acting Director of Trade and Exchange, aims to address market irregularities and stabilize the foreign exchange market as part of the CBN's ongoing reform efforts.

The circular with the title, “Sales of Foreign Exchange To BDCS To Meet Retail Market Demand For Eligible Invisible Transactions”, outlined the rationale behind the directive.

The regulator said that persistent distortions in the retail market were contributing to disparities in exchange rates, particularly in the parallel market

“To address this issue, the CBN has authorised the sale of FX to eligible Bureau De Change, BDCs, to satisfy demands for invisible transactions,” it stated.

Under the directive, each BDC is authorised to purchase 20,000 dollars at a rate of N1,450 per dollar reflecting the lower band of the trading rate observed in the previous session at NAFEM (Nigeria Autonomous Foreign Exchange Market)

“All BDCs are permitted to sell to eligible end-users at a profit margin not exceeding one point five per cent (1.5%) above the CBN purchase rate,” the bank clarified.