The naira extended its rally at the official foreign exchange market on Tuesday, appreciating to N1,351.02 against the United States dollar, as the Central Bank of Nigeria (CBN) unveiled fresh measures to deepen liquidity by allowing licensed Bureau De Change (BDC) operators to participate in the Nigerian Foreign Exchange Market (NFEM).
Data published on the CBN’s official platform showed the local currency gained N3.23 at the close of trading, representing a 0.23 per cent appreciation compared to Monday’s rate of N1,354.25/$1.
The modest but steady strengthening reflects improved liquidity conditions and sustained interventions by the apex bank aimed at stabilising the market amid cautious investor sentiment. Trading volumes were moderate, with dealers closely monitoring policy signals and reform measures.
In a related development, the CBN announced that licensed BDC operators would now be permitted to access foreign exchange through Authorised Dealer Banks at prevailing market rates, a move designed to boost liquidity in the retail segment of the market.
In a circular signed by the Director of the Trade and Exchange Department, Dr. Musa Nakorji, the apex bank approved a weekly foreign exchange purchase cap of $150,000 per BDC.
“All BDCs duly licensed by the CBN are permitted to access foreign exchange through any Authorised Dealer Bank of their choice, at the prevailing market rates,” the circular stated.
The bank said the policy aims to deepen market efficiency and ensure broader access to foreign exchange across the economy, particularly for retail end-users.
However, the CBN attached stringent compliance and risk-management conditions to the new window. Authorised Dealer Banks are required to conduct full Know-Your-Customer (KYC) and due diligence checks before processing FX sales to BDCs.
To enhance transparency, licensed BDCs must submit timely and accurate electronic returns in line with existing regulations. The CBN further directed that any unutilised foreign exchange must be returned to the market within 24 hours, prohibiting BDCs from holding FX positions purchased from the NFEM.
The circular also mandates that all transactions be conducted through settlement accounts with licensed financial institutions. Third-party transactions are prohibited, while cash settlements are capped at a maximum of 25 per cent of each transaction amount.
Market analysts view the dual development — the naira’s appreciation and expanded access for BDCs — as part of the CBN’s broader strategy to strike a balance between improving liquidity and tightening regulatory oversight.
Observers expect exchange rate movements to remain gradual in the near term as authorities continue to implement reforms aimed at boosting investor confidence and strengthening overall market stability.