CBN bans foreign currency importation

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The Central Bank of Nigeria (CBN) has banned the importation of all foreign currencies except with approval in order to safeguard the naira and ensure it is shielded against foreign currency domination.

In a statement signed by CBN Director of Corporate Communications, Mr Ugo Okoroafor, on Tuesday in Abuja, the move was sequel to the Bank’s withdrawal of the operating licence of 20 Bureaux de Change (BDCs) for the purchase and selling of huge sums of U.S. dollars with no documentation to show details of the transactions.

The statement which 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, also  bemoaned the surge in dollar cash importation by banks and the huge cash sales of the dollars to BDCs by the banks.

Meanwhile, following the suspension of the Wholesale Dutch Auction System (WDAS) at the official foreign exchange market, the CBN has also announced that the Retail Dutch Auction System (RDAS) would take effect from Oct. 2.

It said the new system (RDAS) would allow only customers of deposit money banks to buy foreign exchange at the CBN through their banks, against the old order (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.’’

“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.’’

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