CBN Revokes Licences Of 2,991 BDCs
The Central Bank of Nigeria (CBN) has revoked the licences of 2,991 Bureau de Change (BDC) operators, leaving only 2,991 to continue in operations. The move is aimed at curbing illicit financial activities and ensuring exchange rate stability.
The CBN published a list of approved BDCs on Wednesday, showing that the licences of 2,698 BDCs had been cancelled. A similar list published by the apex bank last year had approved 5,689 black market dealers.
BDCs play a significant role in determining the exchange rate in Nigeria. The number of operators has experienced substantial growth, increasing from 74 in 2005 to 5,689 in 2021³. However, the CBN had prohibited the sale of foreign exchange to BDCs due to concerns of round tripping and involvement in illicit financial activities.
The CBN had also implemented key reforms, such as increasing the capitalisation requirements for BDC operators and allowing Nigerian banks to act as primary dealers in the forex market.
Since the floating of the naira by the CBN in June, the currency has depreciated, with the exchange rate reaching N795.28 at the Investors’ and Exporters’ FX Window. At the parallel market, the naira closed at N820 per dollar, N1,095 per British pound, and N905 per Euro.
Analysts say the trimming of BDC operators is part of the efforts to sanitise the black market and restore confidence in the naira. They also urge the CBN to adopt more flexible and transparent policies to address the forex challenges facing the country.