CBN mandates BDCs to cap forex profit at 1.5%

The Central Bank of Nigeria (CBN) on Thursday directed Bureau De Change (BDCs) operators to sell forex at a maximum profit margin of 1.5 per cent, aiming to correct market distortions.

The bank, in a circular to BDC operators and the public, which was signed by Aliyu Mahdi, Acting Director of the Trade and Exchange Department, said that the directive was to normalise the foreign exchange market through ongoing reforms.

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 Nigeria Autonomous Foreign Exchange Market (NAFEM).

“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.

The apex bank instructed eligible BDCs to remit Naira payments to specified CBN Naira Deposit Account Numbers and submit payment confirmations alongside required documentation for disbursement at designated CBN branches in Abuja, Awka, Kano and Lagos.

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