According to a circular dated December 19, 2024, signed by T.G. Allu, on behalf of the CBN’s acting Director, Trade and Exchange Department, the arrangement, which will be in effect from December 19, 2024, to January 30, 2025, is designed to meet seasonal retail demand for forex during the holiday period.

The apex bank noted that transactions will occur at the prevailing NFEM rate, and BDCs are required to adhere to a maximum 1 per cent spread when pricing forex for retail end-users.

According to the CBN, BDCs may purchase forex from a single authorised dealer of their choice, provided they fully fund their accounts before accessing the market.

All transactions conducted under this scheme are expected to be reported to the CBN’s Trade and Exchange Department.

The circular read, “To meet expected seasonal demand for foreign exchange, the CBN is allowing temporary access for all existing BDCs to the NFEM for the purchase of FX from authorised dealers, subject to a weekly cap of USD 25,000.00 (Twenty-five thousand dollars only). This window will be open between December 19, 2024 to January 30, 2025.

“BDC operators can purchase FX under this arrangement from only one authorised dealer of their choice and will be required to fully fund their account before accessing the market at the prevailing NFEM rate. All transactions with BDCs should be reported to the Trade and Exchange department, and a maximum spread of 1 per cent is allowed on the pricing offered by BDCs to retail end-users.”

“The CBN assured the public that Personal Travel Allowance and Business Travel Allowance remain available through banks for legitimate travel and business needs.

“These transactions are to be conducted at market-determined exchange rates within the NFEM framework, as the apex bank reiterated its commitment to ensuring a fully functional and liquid foreign exchange market while addressing price volatility”, the circular read.