CBN restricts forex trading as BDC comes alive

The Central Bank of Nigeria has brought back the Bureau De Change, BDC, with new operational mechanism announced on Friday.

The new mechanism mandates BDC segment of the market to trade foreign currencies at similar rates obtainable on the Investor & Exporter forex window, the directive that observers said is difficult to comply with as the sellers in the parallel market have limited access to the official windows.

The circular signed by the Director, Trade & Exchange Department, Dr. O.S. Naji, said the implementation of the new guideline should be with immediate effect.

It said this was in support of the drive to improve the efficiency of the Nigerian foreign exchange market.

The circular stated, “The spread on buying and selling by BDC operators shall be within an allowable limit of -2.5 per cent to +2.5 per cent of the Nigerian exchange market window weighted average rate of the previous day.

“Mandatory rendition by BDC operators of the statutory periodic reports (daily, weekly, monthly, quarterly and yearly), on the financial institution forex rendition system which has been upgraded to meet operators’ requirements.

“Operators are to note that with effect from the date of this circular, non-rendition of returns would attract sanctions which may include withdrawal of operating licence. Where operators do not have any transaction within the period, they are expected to render nil returns.

“Please, be guided accordingly and ensure compliance.”

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