As part of its resolve to strengthen and ensure stability of the nation’s currency, the Naira, the Central Bank of Nigeria (CBN), on Tuesday, announced a ban on importation of all foreign currencies without its prior approval.The latest move, sequel to last week’s withdrawal of operating license of 20 Bureaux de Change (BDCs), according to the statement, is in line with its determination to save the Naira and the Nigerian economy from external threats and dominance.

The 20 BDCs, including one bank affiliate was found to have purchased and sold huge sums of U.S. Dollars without documents to show details of such transactions.

CBN’s Deputy Governor in charge of Economic Policy, Dr. (Mrs.) Sarah Alade, reiterated what CBN’s Governor, Lamido Sanusi said at the last meeting of the Monetary Policy Committee (MPC) that the apex bank’s management frowned at the existence of strong foreign exchange demand pressures from domestic sources, which are not necessarily linked to increase in the import of goods and services.

She said the management also observed the surge in U.S. Dollar cash import by Nigerian banks, and the huge cash sale of the US dollars to BDCs by banks.

Stressing that Nigeria currently ranks as the largest importer of U.S. Dollars, unfortunately, she noted, the purchase and sale of such is not adequately documented by the BDCs.

“If the trend is not contained, it could pose grave threats to the value of the Naira as well as the Nigerian economy, which has gradually become dollarized.

“The CBN Governor, Sanusi and his team decided to take immediate action to safeguard the Naira and ensure its stability in the face of the aforementioned challenges,” Mrs. Alade stressed.

Meanwhile, the Retail Dutch Auction System (RDAS, takes effect today, Wednesday, October 2, 2013, following the suspension of the Wholesale Dutch Auction System (WDAS) at the official foreign exchange market.

The statement from the CBN disclosed that the RDAS will allow only customers of deposit money banks to buy foreign exchange at the CBN through their banks as 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.



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