Central Bank Of Nigeria, CBN Ban US Dollars Importation To Stabilise Naira

* The Central Bank of Nigeria, CBN has cancelled
importation of US Dollars and all foreign
currencies due to the seemingly dollarisation of
the economy.
On Tuesday, The Central Bank Of Nigeria stated
that the move was part of its resolve to save the
naira as well as the economy from external
threats and dominance.
However, commercial banks can only bring in
foreign currency into the country after getting the
necessary approval from the CBN.
A statement from the CBN’s Deputy Governor in
charge of Economic Policy, Mrs. Sarah Alade,
reiterated that at the last Monetary Policy
Committee (MPC) meeting, member of the
committee had expressed concern over the strong
foreign exchange demand from domestic sources,
which according to her, were not linked to
increase in the import of goods and services.
She explained: “The CBN Governor, Mallam Sanusi
Lamido Sanusi and his team decided to take
immediate action to safeguard the naira and
ensure its stability.”
Alade disclosed that the MPC also observed the
surge in United States dollar cash importation by
Deposit Money Banks (DMBs) and the subsequent
sale of huge amount of the greenback to Bureaux
De Change (BDC) operators.
The apex bank last week revoked the operating
licence of 20 BDCs that were alleged to have
purchased and sold huge sums of United States’
dollars with no documentation to show details of
the transactions.
While revealed that Nigeria currently ranks as the
largest importer of US dollars in the world.
According to her, if the trend was not contained, it
could pose grave threats to the value of the naira
as well as the Nigerian economy.
Meanwhile, trading at the Retail Dutch Auction
System (RDAS), which was re-introduced by the
central bank last week following the suspension of
the Wholesale Dutch Auction System (WDAS) will
commence tomorrow.
According to the CBN, the RDAS would only allow
bank customers buy forex at the CBN through
their banks as against the WDAS where banks
used to buy forex at the CBN on their own
accounts and in turn sell 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,” the central bank
added.
While condemning the action of erring BDCs, the
CBN emphasised the continued relevance of the
BDCs in the forex market, even as it stressed that
it would continue to support their operations in
line with the existing guidelines.
Furthermore, in order to guard against stifling the
activities of the BDCs, the CBN authorised all
deposit money banks to deal at the official foreign
exchange market rate.
It also warned that the banks would only sell forex
cash to BDCs subject to a maximum of $250,000
per BDC per week.
THISDAY