CBN extends $25,000 weekly foreign exchange gross sales to BDCs

The Central Bank of Nigeria has prolonged the short-term entry granted to Bureau de Change operators for buying overseas alternate from the Nigerian International Trade Market until Could 30, 2025.

This extension was disclosed in a round issued on Monday by the Commerce and Trade Division of the apex financial institution, permitting BDCs to proceed buying foreign exchange from authorised sellers beneath current circumstances.

The round, referenced TED/FEM/PUB/FPC/001/003 and signed by Dr. W. J. Kanya, the appearing Director of the Commerce & Trade Division, referred to an earlier directive TED/FEM/PUB/FPC/001/030 issued on December 19, 2024.

The earlier round had granted short-term entry to current BDCs to supply overseas alternate from authorised sellers, with a weekly cap of $25,000.

Initially set to run out on January 31, 2025, the directive has now been prolonged for one more 4 months, till Could 30, 2025.

The CBN acknowledged that each one different phrases and circumstances outlined within the earlier round stay unchanged.

The extension reveals the financial institution’s dedication to sustaining a completely useful overseas alternate market, guaranteeing liquidity, and addressing retail demand for eligible invisible transactions.

It added that it could proceed to supply liquidity when essential to handle worth volatility.

The round learn, “We consult with our round TED/FEM/PUB/FPC/001/030 dated December 19, 2024, which granted short-term entry to current BDCs to the NFEM for the acquisition of FX from Authorised Sellers, topic to a weekly cap of USD25,000.00.

“The expiry date of January 31, 2025, which was granted within the above-mentioned round, has been prolonged to Could 30, 2025.

“All different phrases and circumstances within the above-mentioned round stay unchanged.

The CBN stays dedicated to a completely useful overseas alternate market and can proceed to supply liquidity when essential to handle worth volatility.”

The choice comes at a time when the nation’s FX reserves are dropping quick.

Nigeria’s overseas alternate reserves skilled a big decline in January 2025, dropping by $1.11bn over the course of the month.

Based on knowledge from the CBN, the nation’s reserves stood at $40.88bn on January 2, however by January 30, they’d fallen to $39.77bn.

This represents a 2.72 per cent lower inside one month.

The decline in reserves follows ongoing interventions by the CBN within the overseas alternate market, in addition to exterior debt servicing obligations and capital outflows.

Whereas the naira appreciated considerably inside the similar month, the discount in reserves appears to recommend that the CBN could have deployed a part of its FX stockpile to stabilise the native foreign money and handle liquidity within the official market.

By permitting continued entry to foreign exchange, the apex financial institution goals to reinforce liquidity on the retail finish of the market, guaranteeing that BDCs meet the demand for private and business-related transactions.

Over the previous 12 months, the CBN has carried out a number of measures to control overseas alternate entry and curb hypothesis, together with stricter oversight of BDC operations, enforcement of regulatory compliance, and reforms geared toward unifying alternate charges.

The newest extension indicators a measured method to managing foreign exchange demand whereas sustaining stability available in the market.