CBN Restores BDC Services: Introduces New Operational Policies

By: Damian Okonkwo

The Central Bank of Nigeria (CBN) has restored the services of Bureau De Change (BDC) operators in the country, two years after suspending them. The apex bank also announced a new set of operational guidelines for BDCs, aimed at improving transparency and efficiency in the foreign exchange market.

Under the new guidelines, the spread between the buying and selling prices of foreign exchange by BDCs will be limited to 2.5%. This is in contrast to the previous policy, which allowed BDCs to charge a spread of up to 5%.

The CBN also said that BDCs will now be required to render daily, weekly, monthly, quarterly, and yearly reports on their foreign exchange transactions. This is aimed at helping the CBN to better monitor the activities of BDCs and to ensure that they are complying with the new guidelines.

The CBN's decision to restore BDC services is a major policy shift. The apex bank suspended BDCs in 2021, citing concerns about illegal activities in the BDC segment of the foreign exchange market. However, the CBN has said that the new guidelines will help to address these concerns and to create a more transparent and efficient foreign exchange market.

The restoration of BDC services is expected to help to improve the availability of foreign exchange in Nigeria. BDCs are a major source of foreign exchange for businesses and individuals, and their return to the market is likely to lead to a decrease in the black market premium for foreign exchange.

The CBN's new operational guidelines for BDCs are also a positive development. The stricter regulations are likely to deter illegal activities in the BDC segment of the foreign exchange market and to promote transparency.

Additionally, the CBN further introduced a new foreign exchange price verification system (PVS) portal. This portal will be used to verify the prices of foreign exchange quoted by BDCs and other market participants.

Overall, the CBN's decision to restore BDC services and to introduce new operational guidelines is a positive step towards improving the foreign exchange market in Nigeria. The new policies are likely to lead to a more transparent and efficient market, which will benefit businesses and individuals alike.