The Central Bank of Nigeria (CBN) has extended the deadline for Bureau de Change (BDC) operators to purchase foreign exchange (FX) from the Nigerian Foreign Exchange Market (NFEM) until May 30, 2025. Initially set to expire on January 30, this extension aims to improve liquidity in the FX market and provide a more structured framework for retail currency transactions. For business owners and entrepreneurs, this policy shift presents both opportunities and challenges, particularly for those engaged in international trade, imports, and travel.
Under the new directive, BDCs can continue purchasing up to $25,000 per week from the NFEM. This move is designed to keep FX flowing in the market, helping businesses that rely on foreign currency for operations. The decision to extend the purchase deadline for BDCs will prevent excessive price fluctuations. Moreover, the CBN has reinforced a 1% maximum spread rule for BDCs when selling FX to retail customers. This ensures businesses can access foreign currency at more stable and transparent rates, reducing unpredictable markups.
By extending BDC access to FX, the CBN aims to curb volatility and maintain a more predictable exchange rate environment. If successful, this could help businesses plan their costs better and reduce sudden financial shocks tied to fluctuating currency values. In addition, Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) remain available through banks at market rates, ensuring that entrepreneurs and business professionals traveling for work can still access FX for legitimate travel expenses.
Implications for Businesses: Planning for Stability and Compliance
While this extension provides some relief, businesses should continue tracking exchange rate movements and planning their FX needs in advance. Staying updated on market conditions will help entrepreneurs make better financial decisions and mitigate risks. All FX transactions under this framework must be reported to the CBN’s Trade and Exchange Department. Businesses engaging with BDCs should ensure full compliance to avoid regulatory issues that could disrupt their operations.
Given ongoing uncertainties in the FX market, businesses should consider diversifying their currency sourcing strategies, negotiating flexible payment terms with suppliers, or exploring hedging options to reduce exposure to forex fluctuations.
What This Means for Nigerian Businesses
While the extension of FX access for BDCs provides short-term relief, it does not eliminate long-term forex challenges. Business owners must remain proactive in managing currency risks, staying compliant with CBN guidelines, and adapting their financial strategies accordingly.
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