CBN Approves $150,000 Weekly FX Access for 82 BDC Operators to Boost Dollar Liquidity
The Central Bank of Nigeria (CBN) has taken a significant step to enhance foreign exchange liquidity by granting 82 recapitalised Bureau De Change (BDC) operators access to up to $150,000 weekly from the Nigerian Foreign Exchange Market (NFEM). This strategic move is designed to improve dollar supply in the retail segment, ease pressure on the parallel market, and support the stability of the naira.
Strategic Decision to Address Dollar Shortages
Industry stakeholders have hailed the CBN's decision as timely and strategic. By allowing these approved BDCs to purchase foreign currency through authorised dealer banks at current market rates, the apex bank aims to address the persistent dollar shortages that have plagued small businesses, travellers, students, and retail importers. For months, limited access to official FX has driven more demand to the parallel market, widening the gap between official and black-market rates.
The approval is strictly limited to the 82 BDC operators that successfully met the new licensing and recapitalisation requirements under revised guidelines issued in line with the Banks and Other Financial Institutions Act (BOFIA) 2020. These operators were required to increase their capital base and reapply for licences, with only 82 meeting the updated conditions and receiving final approval from the CBN.
Expected Impact on Retail FX Market
Market observers note that while $150,000 per operator may seem modest compared to Nigeria's overall FX demand, the combined effect could be substantial. If all 82 operators fully utilise their weekly allocation, more than $12 million could flow into the retail segment each week, amounting to approximately $50 million monthly targeted at genuine end users. This steady supply is expected to:
- Reduce speculative demand in the parallel market
- Narrow the difference between official and black-market exchange rates
- Boost confidence in the naira
In recent weeks, the naira has shown signs of stability, supported by improved external reserves and clearer policy direction. Experts believe that additional liquidity in the retail market could help sustain this positive trend.
Safeguards and Implementation Challenges
The CBN has introduced strict safeguards to prevent abuse and speculation, including Know Your Customer (KYC) checks and requirements for BDCs to resell unused FX within 24 hours. These measures are intended to ensure that the FX allocations are used for legitimate purposes and do not contribute to market manipulation.
However, in a related development, some BDC operators have reported difficulties in accessing the official foreign exchange window despite the recent improvement in the naira's performance. Latest market figures indicate that the naira strengthened by almost 7% within two weeks across both market segments, reaching one of its strongest levels in nearly two years. This suggests that while the policy framework is in place, implementation challenges may need to be addressed to fully realise the intended benefits.
The CBN's initiative represents a concerted effort to reintegrate licensed BDCs into the official FX supply system under stricter rules, addressing the imbalance that has long characterised Nigeria's foreign exchange market. As the policy unfolds, stakeholders will be closely monitoring its impact on dollar liquidity and naira stability in the coming months.
