The Central Bank of Nigeria (CBN) has banned
the importation of all foreign currencies except
with approval.
This was contained in a statement signed by CBN
Director of Corporate Communications, Mr Ugo
Okoroafor, on Tuesday in Abuja. It said that the move
was sequel to the Bank's withdrawal of the operating
licence of 20 Bureaux de Change (BDCs).
The CBN alleged that the BDCs purchased and sold
huge sums of U.S. dollars with no documentation to
show details of the transactions.
The statement quoted the Deputy Governor, Economic
Policy, Dr Sarah Alade, as saying that the CBN
frowned at the existence of strong foreign exchange
demand pressure from domestic sources.
She said that the CBN had observed a surge in dollar
cash importation by banks and the huge cash sales of
the dollars to BDCs by the banks. She disclosed that
the purchase and sale of the cash were not adequately
documented by the BDCs.
Alade said that if the trend was not contained, it could
pose grave threats to the value of the naira as well as
the Nigerian economy which had gradually become
dollarised.
She said the CBN Governor, Malam Sanusi Lamido
Sanusi, and his team decided to take immediate
action to safeguard the naira and ensure its stability
in the face of the aforementioned challenges.
Meanwhile, the CBN has also announced that the
Retail Dutch Auction System (RDAS) would take effect
from Oct. 2. This followed the suspension of the
Wholesale Dutch Auction System (WDAS) at the
official foreign exchange market.
It said that the RDAS would allow only customers of
deposit money banks to buy foreign exchange at the
CBN through their banks. This is against the WDAS
where the deposit money banks bought foreign
exchange at the CBN on their own accounts and in
turn sold to their customers.
"The re-introduction of the RDAS is expected to
prevent round tripping of foreign exchange purchased
at the CBN official window to unauthorised channels.
"Also, a circular has been issued mandating all
deposit money banks to redeem all inward money
transfers in naira to the recipients at the prevailing
inter-bank foreign exchange rate. "This is in line with
best practice,'' it said.
The statement said that apex bank would continue to
support the operations of BDCs in line with existing
guidelines, adding that BDCs were still relevant in the
foreign exchange market.
"To guard against stifling the activities of the BDCs,
the CBN has authorised all deposit money banks to
deal at the official foreign exchange market rate. "It
also warned that banks can only sell foreign exchange
cash to BDCs subject to a maximum of 250,000
dollars per week per BDC.
"The CBN also advised all BDCs to continue to comply
with the conditions of their operating licences,
including the proper rendition of returns with respect
to the purchases and sales of foreign exchange.''
The statement said that the apex bank had assured
members of the public of its commitment to
maintaining price stability and the preservation of the
value of the naira in accordance with its mandate.

1st to comment

woooo...... Good work!!!

My ignorant question, do u buy money with money?

martyns303: My ignorant question, do u buy money with money?

Answer to ur ignorant question... Yes,u buy money with money