CBN retains BDC forex restrictions over control, abuse concerns

By Abubakar Yunusa

The Central Bank of Nigeria has sustained restrictions on Bureau De Change operators’ access to the official foreign exchange market, citing control concerns and past abuses.
Findings from forex traders and market operators indicate that the apex bank remains cautious about widening access to the official FX window.
The development underscores the regulator’s continued preference for a bank-led foreign exchange distribution system.
Market sources said the stance is driven by persistent worries over compliance, market stability and oversight within the BDC segment.
There are also lingering fears about arbitrage and round-tripping among some currency traders.
BDC operators had earlier lamented limited access to official foreign exchange, noting that the constraint has affected their ability to meet operational costs.
They have consistently called for broader participation in the FX market to boost liquidity and sustain policy gains.
However, traders said the CBN’s cautious posture reflects deeper regulatory concerns about control and risk exposure.
A top official of the Association of Bureau De Change Operators of Nigeria stated that issues around anti-money laundering and terrorism financing compliance have placed the sector in a high-risk category.
He said this has led to the apex bank’s preference for fewer channels and tighter control through banks.
Another licensed forex trader, Umar Barkinzuwo, said authorities favour the banking system due to its centralised oversight structure.
He added that concerns over arbitrage and round-tripping have further limited the full integration of BDCs into the official FX framework.
According to market operators, the regulator believes tighter control through banks will help reduce leakages and improve monitoring of foreign exchange flows.