CBN Tightens Dollar Supply, Squeezes BDC Operators in Nigeria

The Central Bank of Nigeria (CBN) has reduced US dollar allocations, squeezing Bureau de Change (BDC) operators and draining market liquidity. This move has raised operational costs for currency traders, with an estimated 90% of dollar liquidity circulating outside formal channels.

The tightening compliance rules, revocation of licenses, and increased operational expenses have strained the BDC sector, forcing some to scale down activities or absorb losses. This shift towards the parallel market has increased exchange rates, impacting businesses and individuals reliant on legitimate dollar transactions.