The Central Bank of Nigeria (CBN) has banned the negotiation of exchange rates with customers outside the given foreign exchange market.

The apex bank also mandated that all customer transactions should be conducted only with entities properly licensed to operate within the foreign exchange market.

The CBN also stressed that all forex transactions carried out with authorized dealers, BDC operators, and IMTOs should follow the terms of their respective licences.

Bureaux de change (BDCs) are also allowed to buy foreign currency from authorised dealers to cater to their customers, provided they adhere to the monthly transaction cap set by the CBN.

A circular signed by Dr Omolara Omotunde Duke, Director of the Financial Markets Department at the CBN, stated that the permission applies to BDCs licensed under the updated guidelines referenced ‘FPRD/DIR/PUB/CIR/002/010,’ issued on May 22, 2024.

According to the document, all foreign exchange transactions carried out with authorized dealers, BDC operators, and international money transfer operators (IMTOs) must strictly comply with the terms of their respective licences.

The CBN also encouraged market participants to uphold the highest standards of ethics and professionalism in their dealings, aligning with the Nigerian FX Code.

The CBN stated that the pricing of foreign exchange transactions within the Nigerian Foreign Exchange Market (NFEM) will be conducted through the Electronic Foreign Exchange Matching System (EFEMS).

Also, all interbank transactions are required to be finalized on the EFEMS to ensure full transparency and compliance with both the EFEMS rules and the Nigerian FX Code issued by the CBN.

It would be recalled that a few weeks ago, the CBN had directed all banks in the interbank FX market to move to the Bloomberg BMatch system for forex trading.