The Central Bank of Nigeria (CBN) has increased its surveilance of Bureau de Change (BDC) operators following reported cases of fereign exchange abuses, BusinessDay has learnt.
The development followed activities of the the BDCs which failed the recapitalisation test of the CBN, but which are still operating. The CBN said it is committed to bringing sanity into the forex market and the only option left for it now is to increase its surveillance.
But BusinessDay gathered last night, that the apex bank would deploy the approach of utilising the recapitalised BDCs as agents of international money transfer, to ensure gradual elimination of the unrecapitalised ones.
“The CBN is careful not to cause panic in the market by outright withdrawal of the operating licenses of those BDCs that failed to meet the requirement, but involving the recapitalised ones would gradually estinguish the illegal ones from operation,” said a source close to CBN.
Ibrahim Mu’azu, CBN’s director, corporate communications, told BusinessDay that the supervision exercise is a routine one, adding that it is one of the measures the bank will take to curtail the activities of illegal BDC operators.
“It is a process but the result of the report will help us reach a conclusion”, he said.
Analysts said last night that the absence of a functional operating code of conduct for the newly recapitalised BDC operators may be responsible for current abuses, as the recapitalised ones are still patronising the 1,058 BDCs that failed to be recapitalised.
Some analysts said yesterday that the options left for the CBN were either to come out with a policy that prevents banks and BDCs from selling forex to the unrecapitalised ones, or introduce retail transactions that require forex market operators to give a breakdown of the demand and uses for the forex on item basis.
But the CBN insists that it will soon come up with a position on the activities of these foreign exchange operators.
“The CBN will come up with a position. It is a normal process of management, planning, review and execution”, Mu’azu said.
He further noted that the CBN has stopped selling dollars to the unrecapitalised BDCs, adding that the apex bank has not announced any increase in the amount of dollar supply to BDCs as was being speculated by some operators.
However, Andrew Elueni, chief executive officer of Prime Link BDC noted that activities in the BDC segment of the foreign exchange market are beginning to stabilise, but added that some unrecapitalised BDCs were still operating.
He was concerned that these illegal operators patronising banks may have negative impact on banks in terms of rendition of returns.
Elueni admitted that operators are expecting the CBN to increase the amount of dollars supply to recapitalised BDCs to about N50,000 from the current N15,000 so as to further strengthen and stabilise the market.
Consequently, the local currency on Thursday appreciated by N1.00k or 0.6 percent to N167.00k/$ from N168/$ on Monday at the BDC. Also at the inter-bank market, the naira gained N0.30k against the dollar as it closed at N162.10/$ compared to N162.40 previous day.
Meanwhile, the CBN on Wednesday offered a total of $300 million but sold a total of $298.9 million to 22 deposit money banks in the country at the official foreign exchange rate of N155.73/$ at its bi-weekly Retail Dutch Auction System (RDA).
There are three sources of dollar access by BDCs which include the Apex bank, deposit money banks and individuals.
HOPE MOSES-ASHIKE
