CBN Tightens FX Rules: Limits Dollar Purchase From BDCs, Introduces $10,000 Cap For School Fees

CBN Tightens FX Rules: Limits Dollar Purchase From BDCs, Introduces $10,000 Cap For School Fees

In a bid to regulate foreign exchange transactions and streamline the process, the Central Bank of Nigeria (CBN) has instituted new limits on the sale of foreign currency by Bureau De Change (BDC) operators…..READ ALSO CBN’s Bold Move: Forex Sellers Above $10,000 Must Disclose Source

This decisive move was unveiled through the release of a document titled ‘Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria’, dated February 23, 2024.

Under the revised guidelines, individuals seeking foreign currency for personal or business travel allowances (PTA/BTA) are now subject to stricter regulations. BDCs are authorized to sell foreign currency up to $4,000 and $5,000 respectively, to an individual once every six months. Transactions of this nature must be accompanied by essential documentation including the individual’s BVN or TIN, completed e-forms, valid passport, visa, and international return ticket.

Moreover, for business travel allowances, customers must furnish a letter of request from the corporate entity outlining the purpose of the visit, along with pertinent business registration or incorporation certificates.

In a notable addition, the CBN mandates that foreign currency sales for medical bills, capped at $5,000 annually, must be transferred directly from the BDC’s domiciliary account to a Nigerian bank. The funds are then designated for direct payment to the medical facility, substantiated by a comprehensive set of medical documents and valid identification.

However, the most significant change comes in the form of a cap on foreign currency sales for school fees, set at $10,000 annually per customer. These fees, channeled through the BDC’s domiciliary account, are earmarked for direct payment to the educational institution and require extensive documentation including admission evidence, air tickets, and specialist doctor statements.

The CBN asserts its authority to review these limits and transaction frequencies periodically, underscoring its commitment to maintaining stability and oversight within the foreign exchange market.

This new directive signals a concerted effort by the CBN to refine FX operations, ensuring transparency, accountability, and adherence to regulatory standards while facilitating essential transactions for Nigerians.