Following its revocation of the operating licences of 20 Bureaux de Change last week, the Central Bank of Nigeria (CBN) has banned the importation of all foreign currencies without prior approval.
The 20 Bureaux de Change are alleged to have purchased unusually large sums of foreign exchange, reported to be US dollars, from deposit money banks in clear contravention of money laundering and terrorism prevention legislation amended in 2011.
Announcing the revocations, a letter to all authorised Bureaux warned that the CBN hopes that the move will “serve as a deterrent to others and demonstrate Government’s resolve to stamp out money laundering and also the Bank’s zero tolerance for regulatory infractions.”
Speaking in Abuja, CBN Deputy Governor of Economic Policy, Ms. Sarah Alade, said that if the trend for large undocumented transactions 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”. Nigeria ranks as the largest importer of US dollars globally, to the chagrin of CBN Governor Lamido Sanusi.
Ms. Alade said Mr. Sanusi and his team decided to take immediate action to safeguard the naira and ensure its stability in the face of the aforementioned challenges.
The Central Bank has also announced that the Retail Dutch Auction System (RDAS) would take effect from Wednesday, October 2. This follows the suspension of the Wholesale Dutch Auction System (WDAS) at the official foreign exchange market.
The CBN said that the RDAS would allow only customers of deposit money banks to buy foreign exchange at the CBN through their banks. Under the WDAS, the deposit money banks bought foreign exchange at the CBN on their own accounts and in turn sold to their customers.
The CBN statement explains: “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.”
The statement said that apex bank would continue to support the operations of Bureaux de Change in line with existing guidelines, adding that they were still relevant in the foreign exchange market.
“To guard against stifling the activities of the Bureaux de Change, 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 Bureaux de Change subject to a maximum of 250,000 dollars per week per Bureau.
“The CBN also advised all Bureaux de Change 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 Bank offered assurances to 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.
